SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 13, 1996
LYNTON GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-6867 13-2688055
(State or other (Commission I.R.S. Employer
jurisdiction of file number) Identification
incorporation or Number)
organization)
9 Airport Road
Morristown Municipal Airport
Morristown, New Jersey 07960
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (201) 292-9000
Item 5. Other Events.
Background
Pursuant to a Credit Agreement, as amended, entered into in
August 1990 (the "Credit Agreement"), HM Holdings, Inc., an
indirect wholly-owned subsidiary of Hanson PLC ("HM Holdings"),
had provided secured debt financing in the aggregate amount of
$17,000,000 to Lynton Group, Inc. (the "Company") and Lynton Jet
Centre, Inc., a wholly-owned subsidiary of the Company ("Lynton
Jet Centre"). Specifically, in August 1990, HM Holdings made a
$2,000,000 term loan to the Company (the "Company Term Loan"), a
$10,800,000 term loan to Lynton Jet Centre (the "Lynton Jet
Centre Term Loan") and provided a $4,200,000 revolving credit
facility to Lynton Jet Centre (the "Revolving Credit Loans" and,
together with the Company Term Loan and the Lynton Jet Centre
Term Loan, collectively the "Loans"). In August 1994, the
Revolving Credit Loan was reduced from $4,200,000 to $3,200,000.
In June 1994, the Company Term Loan was repaid in full
together with all principal payments on the Lynton Jet Centre
Term Loan except for the final payment in the principal amount of
$2,905,923 which would be due on September 30, 1997. The Credit
Agreement also provided that the Revolving Credit Loans of
$3,200,000 would also be due on September 30, 1997. In October
1994, HM Holdings agreed to an additional $500,000 Revolving
Credit Loan. As a result, prior to the completion of the Debt
Discharge Transaction (as described below), the principal amount
owing to HM Holdings under the Loans was $6,605,923.
Debt Discharge Transaction
Debt Discharge Agreement
On November 8, 1996, a Debt Discharge Agreement (the "Debt
Discharge Agreement") was entered into by and among Hanson North
America, Inc. ("Hanson North America"), Millennium America Inc.
(formerly named Hanson America Inc.) ("Millennium America"), and
the Company, Lynton Jet Centre and Lynton Properties, Inc. (a
wholly-owned subsidiary of Lynton Jet Centre). Prior thereto,
Hanson North America had succeeded to HM Holdings as lender under
the Credit Agreement and had acquired certain assets of HM
Holdings including the equity securities described below.
Pursuant to the Debt Discharge Agreement and on November 13,
1996, Hanson North America was paid the sum of $3,500,000, and in
consideration thereof (plus other consideration described below),
(i) cancelled the Loans and discharged all obligations under the
Credit Agreement except for certain indemnification obligations
stated therein to survive termination of the Loans, (ii)
surrendered to the Company 848,455 shares of common stock, par
value $.30 per share (the "Common Stock"), of the Company, (iii)
surrendered Warrants to purchase an aggregate of 247,513 shares
of Common Stock of the Company, and (iv) surrendered 2,000 shares
of Series D Preferred Stock of the Company (the "Debt Discharge
Transaction"). The foregoing shares and Warrants represented
Hanson North America's entire equity interest in the Company. As
provided in the Debt Discharge Agreement, the foregoing
transactions were deemed to have occurred as of September 30,
1996.
In connection with the Debt Discharge Transaction, Hanson
North America also released all security and liens under the
Credit Agreement, including its First Leasehold Mortgage (the
"Leasehold Mortgage") and Assignment of Rents on the Jet Centre
facility operated by Lynton Jet Centre at the Morristown
Municipal Airport, Morristown, New Jersey. In addition,
Millennium America, which previously guaranteed certain
obligations of Lynton Jet Centre which were also secured by the
First Leasehold Mortgage, terminated and released its interests
in the Leasehold Mortgage.
Lease Amendment
Under the terms of an Agreement of Lease entered into in
August 1990, as amended in July 1994 (the "Lease"), Lynton Jet
Centre has been leasing to HM Industries, Inc., an affiliate of
HM Holdings, office and hanger space at the Jet Centre facility
in Morristown, New Jersey. Prior to July 1, 1994, the annual
rent under the Lease was $325,000. Commencing July 1, 1994, the
annual rent was reduced to $250,000.
In connection with the Debt Discharge Transaction, and on
November 8, 1996, Lynton Jet Centre entered into a Second
Amendment to the Lease and Partial Assignment and Assumption of
the Lease (the "Second Amendment") with Hanson North America
(which prior thereto had merged with HM Industries with Hanson
North America being the surviving entity) and Millennium America
Holdings, Inc. ("Millennium Holdings"). Under the terms of the
Second Amendment, Hanson North America assigned to Millennium
Holdings an undivided one-half interest in and to the Lease. The
Second Amendment provides that the term of the Lease shall end on
November 7, 2001 and that no rent is or shall be due for the
remainder of the term. The Second Amendment also provides that
if at any time during the term of the Lease, space sufficient to
accommodate an additional aircraft shall become available at the
Jet Centre facility for rental, Hanson North America and
Millennium Holdings shall have the right of first refusal with
respect to such available space to lease such space for a period
of five years at a rental rate of $40,000 per year.
In conjunction with the Second Amendment, Lynton Jet Centre,
Hanson North America and Millennium Holdings entered into a Jet
Fuel Agreement on November 8, 1996 whereby Lynton Jet Centre
agreed to sell jet fuel to Hanson North America and Millennium
Holdings at the Jet Centre facility at 110% of Lynton Jet
Centre's actual cost of such fuel for so long as aircraft of
Hanson North America and Millennium Holdings is based at the Jet
Centre facility.
Refinancing of the Jet Centre Facility
Simultaneously with the completion of the Debt Discharge
Transaction, and in order to pay Hanson North America $3,500,000
in connection therewith, Lynton Jet Centre, as borrower, entered
into a Loan and Security Agreement dated November 13, 1996 with
Finova Capital Corporation ("Finova"), as Lender, pursuant to
which Finova made a secured loan to Lynton Jet Centre in the
principal amount of $4,000,000 (the "Finova Loan").
The Finova Loan is secured by a security interest in
substantially all of the assets and properties of Lynton Jet
Centre, including a Leasehold Mortgage on the Jet Centre facility
(excluding the portion of the facility subject to a Leasehold
Mortgage held by Massachusetts Mutual Life Insurance Company, as
assignee of Connecticut Mutual Life Insurance Company). In
addition, the obligations of Lynton Jet Centre under the Finova
Loan have been guaranteed by the Company and certain other
subsidiaries of the Company, namely, Ramapo Helicopters, Inc.,
Lynton Aviation, Inc., Lynton Aviation Services and LynStar
Aviation, Inc.
The Finova Loan, together with interest thereon at the
interest rate of 10.7% per annum (the "Interest Rate") shall be
repaid in 96 equal consecutive monthly payments consisting of (a)
principal and interest calculated at the Interest Rate each in an
amount that will fully amortize 65% of the Finova Loan at the
Interest Rate over the term of the Finova Loan (8 years) plus (b)
interest on 35% of the Finova Loan calculated at the Interest
Rate. The remaining unpaid principal balance of the Finova Loan
plus all accrued and unpaid interest on the Finova Loan
calculated at the Interest Rate shall be payable with the 96th
payment which shall be the maturity date of the Finova Loan.
The Finova Loan requires compliance with certain covenants,
financial and otherwise, including maintaining a minimum tangible
net worth and an EBITDA coverage ratio.
Other Information
Prior to the completion of the Debt Discharge Transaction,
the Company had outstanding 1,962,177 shares of Common Stock.
After giving effect to the surrender of the equity securities
held by Hanson North America (as described above), the number of
outstanding shares of Common Stock was reduced to 1,113,722.
The four holders of all of the outstanding shares of Series
C Convertible Preferred Stock (the "Series C Preferred Stock")
have been offered by the Company and have agreed (effective
retroactively to September 30, 1996) to convert all of the Series
C Preferred Stock into an aggregate of 2,053,876 shares of Common
Stock. Two of such holders are James G. Niven, Co-Chairman and a
director of the Company, and J. O. Hambro Nominees Limited, which
may be deemed to be controlled by Richard Hambro, Co-Chairman and
a director of the Company.
In addition, the holders of the 10% Senior Subordinated
Convertible Debentures due December 31, 1998 (the "Debentures")
of the Company are being given the opportunity to convert the
Debentures into shares of Common Stock of the Company at a
conversion price of $.33 per share. Prior to completion of the
Debt Discharge Transaction and refinancing of the Jet Centre
facility described above, there were Debentures in the principal
amount of $1,960,000 outstanding. Two holders of the Debentures
(one of whom is Paul R. Dupee, Jr., a director of the Company)
have already given their consent to convert the Debentures held
by them (in the principal amount of $1,065,000) into 3,227,273
shares of Common Stock (effective retroactively to September 30,
1996).
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
Exhibits:
99.1 Debt Discharge Agreement dated as of November 8,
1996 by and among Hanson North America, Inc.,
Millennium America Inc., Lynton Group, Inc.,
Lynton Jet Centre, Inc. and Lynton Properties,
Inc.
99.2 Loan and Security Agreement dated November 13,
1996 by and between Lynton Jet Centre, Inc., as
Borrower, and Finova Capital Corporation, as
Lender.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
LYNTON GROUP, INC.
(Registrant)
Date: November 27, 1996 By:/s/Manus O'Donnell
Manus O'Donnell,
Vice President of Finance,
Chief Financial Officer,
Secretary and Treasurer
Commission File No. 0-6867
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
EXHIBITS
filed with
CURRENT REPORT
ON FORM 8-K
DATE OF REPORT: NOVEMBER 13, 1996
LYNTON GROUP, INC.
INDEX TO EXHIBITS
Page
99.1 Debt Discharge Agreement dated as of November 8, 1996
by and among Hanson North America, Inc.,
Millennium America Inc., Lynton Group, Inc.,
Lynton Jet Centre, Inc. and Lynton Properties, Inc.
99.2 Loan and Security Agreement dated November 13, 1996
by and between Lynton Jet Centre, Inc., as Borrower, and
Finova Capital Corporation, as Lender.
EXHIBIT 99.1
DEBT DISCHARGE AGREEMENT
dated as of November 8, 1996
by and among
HANSON NORTH AMERICA, INC.,
MILLENNIUM AMERICA INC.,
LYNTON GROUP, INC.,
LYNTON JET CENTRE, INC.
and
LYNTON PROPERTIES, INC.
TABLE OF CONTENTS
Page
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I -- Definitions . . . . . . . . . . . . . . . . . . . . . . .3
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE II -- Obligations of Hanson North America. . . . . . . . . . .6
2.01 Discharge of Obligations. . . . . . . . . . . . . . . . . .6
2.02 Surrender of Equity . . . . . . . . . . . . . . . . . . . .7
(a) Stock Certificates . . . . . . . . . . . . . . . . . .7
(b) Warrants . . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE III --Obligations of Millennium America. . . . . . . . . . . .8
3.01 Termination of Leasehold Mortgage . . . . . . . . . . . . .8
ARTICLE IV -- Obligations of Lynton Group, Jet Centre and
Lynton Properties. . . . . . . . . . . . . . . . . . . .8
4.01 Payment . . . . . . . . . . . . . . . . . . . . . . . . . .8
4.02 Lease and Jet Fuel Agreement. . . . . . . . . . . . . . . .8
4.03 New Leasehold Mortgage Agreement. . . . . . . . . . . . . .9
ARTICLE V -- Conditions. . . . . . . . . . . . . . . . . . . . . . . .9
5.01 Conditions to Obligations of Hanson North America 9
(a) Representations of Lynton Companies. . . . . . . . . .9
(b) Obligations of Lynton Companies. . . . . . . . . . . .9
(c) Consents . . . . . . . . . . . . . . . . . . . . . . .9
(d) Opinion. . . . . . . . . . . . . . . . . . . . . . . .9
(e) Corporate Proceedings. . . . . . . . . . . . . . . . .10
5.02 Conditions to Obligations of Millennium America . . . . . .
(a) Representations and Warranties of Lynton
Companies. . . . . . . . . . . . . . . . . . . . . .10
(b) Obligations of Lynton Companies. . . . . . . . . . . .10
(c) Opinion. . . . . . . . . . . . . . . . . . . . . . . .10
(d) Corporate Proceedings . . . . . 10
5.03 Conditions to Obligations of Lynton Companies. . . . . . . .11
(a) Representations of Hanson North America . . . . . . . .11
(b) Obligations of Hanson North America and
Millennium America. . . . . . . . 11
(c) Corporate Proceedings . . . . . . . 11
5.04 Conditions to Obligations of All Parties . . . . . . . 11
(a) No Proceedings. . . . . . . . 11
(b) No Violation of Law . . . . . . . . 12
ARTICLE VI -- Representations and Warranties . . . . . . . . 12
6.01 Representations and Warranties of
Lynton Companies . . . . . . . 12
(a) Corporate Status. . . . . . . 12
(b) Corporate Power and Authorization . . . . . . 12
(c) Execution and Binding Effect. . . . . . 12
(d) Governmental Approvals and Filings. . . . . . . . 12
(e) Absence of Conflicts. . . . . . . . 13
(f) Solvency. . . . . . 14
6.02 Representations and Warranties of Hanson North
America. . . . . . . 14
(a) Corporate Status. . . . . . . 14
(b) Corporate Power and Authorization . . . . . . 14
(c) Execution and Binding Effect. . . . . . 14
(d) Governmental Approvals and Filings. . . . . . . . 14
(e) Absence of Conflicts. . . . . . . . 14
(f) Title to Common Shares, Preferred
Shares and Warrants . . . . . . . . 15
(g) Transfer of Loan Documents. . . . . . . 15
(h) Lost Certificate. . . . . . . 15
ARTICLE VII -- Miscellaneous . . . . . . 16
7.01 Further Assurances . . . . . . 16
7.02 Amendments . . . . . . . 16
7.03 Notices. . . . . . . 16
7.04 Severability . . . . . . 17
7.05 Prior Understandings . . . . . . . 17
7.06 Duration; Survival . . . . . . 17
7.07 Counterparts . . . . . . 18
7.08 Governing Law. . . . . . 18
7.09 No Third Party Beneficiaries . . . . . . 18
7.10 Assignment . . . . . . . 18
7.11 Timing . . . . . . . 18
DEBT DISCHARGE AGREEMENT
THIS DEBT DISCHARGE AGREEMENT dated as of November 8,
1996 (this "Agreement"), by and among HANSON NORTH AMERICA, INC.,
a Delaware corporation ("Hanson North America"), MILLENNIUM
AMERICAN INC., a Delaware corporation formerly named Hanson
America Inc. ("Millennium America"), LYNTON GROUP, INC., a
Delaware corporation ("Lynton Group"), LYNTON JET CENTRE, INC., a
New Jersey corporation ("Jet Centre"), and LYNTON PROPERTIES,
INC., a New Jersey corporation ("Lynton Properties").
RECITALS
A. Pursuant to the Credit Agreement dated as of
August 14, 1990 (as heretofore amended, the "Credit Agreement"),
HM Holdings, Inc., presently named Millennium Holdings Inc. ("HM
Holdings") has made loans to Lynton Group and Jet Centre.
B. Hanson North American has succeeded to HM Holdings
as lender under the Credit Agreement, and has acquired certain
assets of HM Holdings (including the Obligations, as defined in
Section 1 and the equity securities described in Recital C).
C. Hanson North America is the owner of 848,455 shares
of Common Stock, par value $.30 per share (the "Common Shares"),
of Lynton Group, 2,000 shares of Series D Preferred Stock, par
value $.01 per share, of Lynton Group (the "Preferred Shares")
and warrants to purchase an aggregate of 247,513 shares of
Common Stock, par value $.30 per share, of Lynton Group (the
"Warrants").
D. Hanson North America has agreed to cancel such
loans and surrender such equity to Lynton Group on the terms and
subject to the conditions set forth in this Agreement.
E. Millennium America has guaranteed certain
obligations of Jet Centre, and Jet Centre's obligation to
reimburse Millennium America for any payments made by Millennium
America pursuant to such guaranty are secured by a First
Leasehold Mortgage, Security Agreement, Financing Statement and
Fixture Filing dated August 14, 1990 from Jet Centre as amended
by the First Modification of Leasehold Mortgage, Security
Agreement, Financing Statement and Fixture Filing dated as of
June 21, 1994 (which mortgage and modification were recorded in
the office of the Clerk of Morris County, New Jersey in Mortgage
Book 3431, Page 185 and in Mortgage Book 5647, Page 001,
respectively) (the "Leasehold Mortgage").
E. Millennium America has agreed to terminate the
Leasehold Mortgage on the terms and subject to the conditions set
forth in this Agreement.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, covenant and agree as follows:
ARTICLE I
Definitions
1.01 Definitions. In addition to other words and
terms defined elsewhere in this Agreement, as used herein the
following words and terms shall have the following meanings,
respectively, unless the context hereof otherwise clearly
requires:
"Assignment Termination" shall have the meaning give to
that term in Section 2.01.
"Closing" shall mean the consummation of the
transactions contemplated by this Agreement.
"Closing Date" shall mean the date on which the Closing
occurs as mutually agreed by the parties hereto, but in no
event later than November 22, 1996.
"Collateral" shall have the meaning given to that term
in the Credit Agreement.
"Common Shares" shall have the meaning given to that
term in Recital C.
"Consent" shall have the meaning given to that term in
Section 5.01(c).
"Credit Agreement" shall have the meaning given to that
term in Recital A.
"Debt Discharge and Release" shall have the meaning
given to that term in Section 2.01(b).
"Equity Transfer Documents" shall have the meaning
given to that term in Section 2.02.
"Governmental Action" shall have the meaning given to
that term in Section 5.01(d).
"Governmental Authority" shall mean any government or
political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator.
"Hanson North America" shall have the meaning given to
that term in the Preamble.
"HM Holdings" shall have the meaning given in Recital
A.
"Jet Centre" shall have the meaning given to that term
in the Preamble.
"Jet Fuel Agreement" shall have the meaning given to
that term in Section 4.02.
"Law" shall mean any law (including common law),
constitution, statute, treaty, convention, regulation, rule,
ordinance, order, injunction, writ, decree or award of any
Governmental Authority.
"Lease Amendment" shall have the meaning given to that
term in Section 4.02.
"Leasehold Mortgage" shall have the meaning given to
that term in Recital E.
"Leasehold Mortgage Termination" shall have the meaning
given to that term in Section 2.01(f).
"Lien" shall have the meaning given to that term in the
Credit Agreement.
"Loan Documents" shall have the meaning given to that
term in the Credit Agreement.
"Lost Certificate" shall have the meaning given in
Section 2.01.
"Lynton Companies" shall mean Lynton Group, Jet Centre
and Lynton Properties.
"Lynton Group" shall have the meaning given to that
term in the Preamble.
"Lynton Properties" shall have the meaning given to
that term in the Preamble.
"Millennium America" shall have the meaning given to
that term in the Preamble.
"Notes" shall have the meaning given to that term in
the Credit Agreement.
"New Leasehold Mortgage Agreement" shall have the
meaning given to that term in Section 4.03.
"Obligations" shall (i) the "Obligations" as such term
is defined in the Credit Agreement and (ii) to the extent
not otherwise included in clause (i), the $500,000 loan made
by HM Holdings to Lynton Group in October 1994, together
with interest thereon, which loan is included in "the
balance outstanding under revolving credit facility with HM
Holdings" in Note 6 to Lynton Group's financial statements
for the fiscal year ended September 30, 1995.
"Person" shall mean an individual, corporation,
partnership, trust, unincorporated association, joint
venture, joint-stock company, Governmental Authority or any
other entity.
"Preferred Shares" shall have the meaning given to that
term in Recital C.
"Receipt and Release" shall have the meaning given to
that term in Section 4.01.
"Release of Liens" shall have the meaning given to that
term in Section 2.01(c).
"Solvent" means, with respect to any Person at any
time, that at such time (a) the sum of the debts and
liabilities (including, without limitation, contingent
liabilities) of such Person is not greater than all of the
assets of such Person at a fair valuation, (b) the present
fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable
liability of such Person on its debts as they become
absolute and matured, (c) such Person has not incurred, will
not incur, does not intend to incur, and does not believe
that it will incur, debts or liabilities (including, without
limitation, contingent liabilities) beyond such person's
ability to pay as such debts and liabilities mature, (d)
such Person is not engaged in, and is not about to engage
in, a business or a transaction for which such person's
property constitutes or would constitute unreasonably small
capital, and (e) such Person is not otherwise insolvent as
defined in, or otherwise in a condition which could in any
circumstances then or subsequently render any transfer,
conveyance, obligation or act then made, incurred or
performed by it avoidable or fraudulent pursuant to, any Law
that may be applicable to such Person pertaining to
bankruptcy, insolvency or creditors' rights (including but
not limited to the Bankruptcy Code of 1978, as amended, and,
to the extent applicable to such Person, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act, or any other applicable Law pertaining to fraudulent
conveyances or fraudulent transfers or preferences).
"Termination Statements" shall have the meaning given
to that term in Section 2.01(e).
"Transaction Documents" shall mean this Agreement, the
Lease Amendment, the Jet Fuel Agreement, the Debt Discharge
and Release, the Release of Liens, the Termination
Statements, the Leasehold Mortgage Termination, the
Assignment Termination, the Equity Transfer Documents, the
Receipt and Release and the New Leasehold Mortgage
Agreement.
"Warrants" shall have the meaning given to that term in
Recital C.
ARTICLE II
Obligations of Hanson North America
2.01 Discharge of Obligations. Upon satisfaction of
the conditions set forth in Sections 5.01 and 5.04 hereof, the
Obligations shall be fully discharged, all Loan Documents shall
automatically terminate, all commitments of Hanson North America
and HM Holdings to lend shall automatically terminate, and all
Liens of Hanson North America and HM Holdings on the Collateral
shall be released; provided, that notwithstanding the foregoing,
any indemnification obligations of the parties to the Loan
Documents that are stated to survive termination of the Loan
Documents shall continue in effect in accordance with their
respective terms. In furtherance of the foregoing, and subject
to the conditions set forth in Sections 5.01 and 5.04 hereof, at
the Closing, Hanson North America shall deliver to Lynton Group
the following documents:
(a) The outstanding Notes duly endorsed to Hanson
North America marked "Cancelled";
(b) An Acknowledgment of Discharge of Debt and Release
in the form of Exhibit A hereto (the "Debt Discharge and
Release");
(c) A General Release of Liens in the form of Exhibit
B hereto (the "Release of Liens");
(d) The stock certificates and stock powers listed on
Schedule 2.01(d) hereto;
(e) UCC-3 termination statements with respect to the
financing statements listed on Schedule 2.01(e) hereto (the
"Termination Statements");
(f) A Termination of Leasehold Mortgage in the form of
Exhibit C hereto (the "Leasehold Mortgage Termination"); and
(g) A Termination of Assignment of Leases and Rents in
the form of Exhibit D hereto (the "Assignment Termination").
Hanson North America hereby agrees to indemnify Lynton
Group and hold Lynton Group harmless from and against any and all
claims, losses or damages, including expenses, costs and
reasonable attorneys' fees, that Lynton Group may incur arising
out of the loss or destruction of any certificate which is
indicated on Schedule 2.01(d) as having been lost or destroyed
(the "Lost Certificate") being transferred to any third party
without notice of any adverse claim; provided, Hanson North
America shall not be obligated to indemnify Lynton Group for any
such claims, losses or damages that result from Lynton Group's
negligence. If Hanson North America finds any Lost Certificate,
it shall promptly deliver it to Lynton Group.
2.02 Surrender of Equity. Subject to satisfaction of
the conditions set forth in Sections 5.01 and 5.04 hereof, at the
Closing, Hanson North America shall surrender to Lynton Group the
following:
(a) Certificates representing the Common Shares and
the Preferred Shares; and
(b) Certificates representing the Warrants,
in each case with such stock powers or other instruments of
transfer as may be reasonably requested by Lynton Group (the
Equity Transfer Documents").
ARTICLE III
Obligations of Millennium America
3.01 Termination of Leasehold Mortgage. Subject to
the satisfaction of the conditions set forth in Sections 5.03 and
5.04 hereof, at the Closing, Millennium America will execute and
deliver to Jet Centre the Leasehold Mortgage Termination. .
ARTICLE IV
Obligations of Lynton Companies
4.01 Payment. Subject to the satisfaction of the
conditions set forth in Sections 5.03 and 5.04 hereof, at the
Closing, Lynton Group shall pay, or cause to be paid, to Hanson
North America, the sum of $3,5000,000 by wire transfer, in
immediately available funds, to an account designated by Hanson
North America, and shall execute a Receipt and Release in the
form of Exhibit E hereto (the "Receipt and Release").
4.02 Lease and Jet Fuel Agreement. Subject to the
satisfaction of the conditions set forth in Sections 5.03 and
5.04 hereof, at the Closing, Jet Centre shall execute and deliver
to Hanson North America and Millennium America Holdings Inc. an
Assignment, Assumption and Amendment of Agreement of Lease in the
form of Exhibit F hereto (the "Lease Amendment") and a Jet Fuel
Agreement in the form of Exhibit G hereto (the "Jet Fuel
Agreement").
4.03 New Leasehold Mortgage Agreement . Subject to
the satisfaction of the conditions set forth in Sections 5.03 and
5.04 hereof, at the Closing, the Lynton Companies shall execute
and deliver to Hanson North America and Millennium America a New
Leasehold Mortgage Agreement in the form of Exhibit H hereto (the
"New Leasehold Mortgage Agreement").
ARTICLE V
Conditions
5.01 Conditions to Obligations of Hanson North
America. The obligations of Hanson North America under Article
II are subject to the satisfaction, at or prior to Closing, of
each of the following conditions (all or some of which may be
waived by Hanson North America):
(a) Representations of Lynton Companies. All of the
representations and warranties set forth in Section 6.01
shall be true and correct as of the Closing Date.
(b) Obligations of Lynton Companies. All of the
covenants and obligations of the Lynton Companies required
to be performed at or prior to Closing shall have been duly
performed.
(c) Consents. Consents to the transactions
contemplated by this Agreement in form and substance
satisfactory to Hanson North America from the parties listed
on Schedule 5.01(c) (the "Consents") shall have been
obtained and copies thereof shall have been delivered to
Hanson North America.
(d) Opinion. There shall have been delivered to
Hanson North America an opinion of counsel to the Lynton
Companies, in form and substance satisfactory to Hanson
North America, as to the matters set forth in Schedule
5.01(c).
(d) Corporate Proceedings. There shall have been
delivered to Hanson North America certificates by the
Secretary or Assistant Secretary of each of Lynton Group and
Jet Centre, dated as of the Closing Date as to (i) true
copies of the articles of incorporation and by-laws (or
other constituent documents) of each such Person in effect
on such date, (ii) true copies of all corporate action taken
by each of Lynton Group and Jet Centre relative to this
Agreement and the other Transaction Documents to which it is
a party and (iii) the incumbency and signature of the
respective officers of each of Lynton Group and Jet Centre
executing this Agreement and such other Transaction
Documents, together with satisfactory evidence of the
incumbency of such Secretary or Assistant Secretary.
5.02 Conditions to Obligations of Millennium America.
The obligations of Millennium America under Article III are
subject to the satisfaction, at or prior to Closing, of each of
the following conditions (all or some of which may be waived by
Millennium America):
(a) Representations of Lynton Companies. All of the
representations and warranties set forth in Section 6.01
shall be true and correct as of the Closing Date.
(b) Obligations of Lynton Companies. All of the
covenants and obligations of the Lynton Companies required
to be performed at or prior to Closing shall have been duly
performed.
(c) Opinion. There shall have been delivered to
Hanson North America an opinion of counsel to the Lynton
Companies, in form and substance satisfactory to
Millennium America, as to the matters set forth in Schedule
5.01(d).
(e) Corporate Proceedings. There shall have been
delivered to Millennium America certificates by the
Secretary or Assistant Secretary of Lynton Properties, dated
as of the Closing Date as to (i) true copies of its articles
of incorporation and by-laws (or other constituent
documents) in effect on such date, (ii) true copies of all
corporate action taken by Lynton Properties relative to this
Agreement and the other Transaction Documents to which it is
a party and (iii) the incumbency and signature of the
officers of Lynton Properties executing this Agreement and
such other Transaction Documents, together with satisfactory
evidence of the incumbency of such Secretary or Assistant
Secretary.
5.03 Conditions to Obligations of the Lynton
Companies. The obligations of the Lynton Companies under Article
IV are subject to the satisfaction, at or prior to Closing, of
each of the following conditions (all or some of which may be
waived by the Lynton Companies):
(a) Representations of Hanson North America. All of
the representations and warranties set forth in Section 6.02
shall be true and correct as of the Closing Date.
(b) Obligations of Hanson North America and Millennium
America. All of the covenants and obligations of Hanson
North America and Millennium America required to be
performed at or prior to Closing shall have been duly
performed.
(c) Corporate Proceedings. There shall have been
delivered to Lynton Group certificates by the Secretary or
Assistant Secretary of Hanson North America and Millennium
America, dated as of the Closing Date as to (i) true copies
of the articles of incorporation and by-laws (or other
constituent documents) of each such Person in effect on such
date, (ii) true copies of all corporate action taken by each
of such Person relative to the Transaction Documents to
which it is a party and (iii) the incumbency and signature
of the respective officers of each of such Person executing
this Agreement and such Transaction Documents, together with
satisfactory evidence of the incumbency of such Secretary or
Assistant Secretary.
5.04 Conditions to Obligations of All Parties The
obligations of all parties hereto are subject to the
satisfaction, at Closing, of each of the following conditions:
(a) No Proceedings. No action, suit, litigation,
investigation or other proceeding shall have been commenced
involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions
contemplated by this Agreement or that would have the effect
of preventing, delaying, making illegal or otherwise
interfering with any of the transactions contemplated by the
Agreement.
(b) No Violation of Law. Neither the consummation nor
performance of any of the transactions contemplated hereby
will contravene or conflict with or violate any applicable
Law.
ARTICLE VI
Representations and Warranties
6.01. Representations and Warranties of Lynton
Companies Each of the Lynton Companies hereby represents and
warrants to Hanson North America and Millennium America as
follows:
(a) Corporate Status. Each of the Lynton Companies is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of
incorporation.
(b) Corporate Power and Authorization. Each of the
Lynton Companies has corporate power and authority to
execute, deliver, perform, and take all actions contemplated
by, each Transaction Document to which it is a party, and
all such action has been duly and validly authorized by all
necessary corporate proceedings on its part.
(c) Execution and Binding Effect. Each Transaction
Document to which a Lynton Company is a party has been duly
and validly executed and delivered by such Lynton Company.
Each Transaction Document to which a Lynton Company is a
party constitutes the legal, valid and binding obligation of
such Lynton Company, enforceable against such Lynton
Company, in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application
affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable
remedies.
(d) Governmental Approvals and Filings. No approval,
order, consent, authorization, certificate, license, permit
or validation of, or exemption or other action by, or
filing, recording or registration with, or notice to, any
Governmental Authority (collectively, "Governmental Action")
is or will be necessary or advisable in connection with the
execution and delivery of the Transaction Documents by the
Lynton Companies, consummation by the Lynton Companies of
the transactions herein or therein contemplated, or
performance of or compliance with the terms and conditions
hereof or thereof by the Lynton Companies.
(e) Absence of Conflicts. Neither the execution and
delivery of the Transaction Documents by the Lynton
Companies, nor consummation by the Lynton Companies of the
transactions herein or therein contemplated, nor performance
of or compliance with the terms and conditions hereof or
thereof does or will
(i) violate or conflict with any Law, or
(ii) violate, conflict with or result in a breach
of any term or condition of, or constitute a
default under, or result in (or give rise to any
right, contingent or otherwise, of any person to
cause) any termination, cancellation, prepayment
or acceleration of performance of, or result in
the creation or imposition of (or give rise to any
obligation, contingent or otherwise, to create or
impose) any Lien upon any of property of any
Lynton Company pursuant to, or otherwise result in
(or give rise to any right, contingent or
otherwise, of any Person to cause) any change in
any right, power, privilege, duty or obligation of
any Lynton Company under or in connection with,
(A) the articles of incorporation or by-laws
(or other constituent documents) of any
Lynton Company,
(B) any agreement or instrument creating,
evidencing or securing any indebtedness or
guaranty to which any Lynton Company is a
party or by which either of them or any of
their respective properties (now owned or
hereafter acquired) may be subject or bound,
or
(C) any other agreement or instrument to
which any Lynton Company is a party or by
which either of them or any of their
respective properties (now owned or hereafter
acquired) may be subject or bound,
except for (x) matters listed on Schedule 6.01(e) hereto as
to which a consent, waiver, amendment or agreement has been
duly obtained and is in full force and effect, and (y) in
the case of clause (ii)(C), matters that, individually or in
the aggregate, could not have a material adverse effect on
the business, financial condition or results of operations
of any Lynton Company. Schedule 6.01(e) hereto sets forth
each consent, waiver, amendment or agreement which has been
obtained in respect of any matter which would, absent such
consent, waiver, amendment or agreement, be within the scope
of the foregoing clause (e), and Hanson America and
Millennium America have received a true, correct and
complete copy of each such consent, waiver, amendment or
agreement and of each of the underlying agreements or
instruments to which it relates.
(f) Solvency. On and as of the Closing Date, after
consummation of the transactions contemplated hereby, and
after giving effect to all obligations and liabilities being
incurred on such date in connection therewith, each of
Lynton Company is and will be Solvent.
6.02 Representations and Warranties of Hanson North
America. Hanson North America represents and warrants to Lynton
Group and Jet Centre as follows:
(a) Corporate Status. Hanson North America is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of
incorporation.
(b) Corporate Power and Authorization. Hanson North
America has corporate power and authority to execute,
deliver, perform, and take all actions contemplated by, each
such Transaction Document, and all such action has been duly
and validly authorized by all necessary corporate
proceedings on its part.
(c) Execution and Binding Effect. Each Transaction
Document to which Hanson North America is a party has been
duly and validly executed and delivered by Hanson North
America. Each such Transaction Document constitutes the
legal, valid and binding obligation of Hanson North America
enforceable against Hanson North America in accordance with
its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the
availability of equitable remedies.
(d) Governmental Approvals and Filings. No
Governmental Action is or will be necessary or advisable in
connection with the execution and delivery of the
Transaction Documents by Hanson North America, consummation
by Hanson North America of the transactions herein or
therein contemplated, or performance of or compliance with
the terms and conditions hereof or thereof by Hanson North
America.
(e) Absence of Conflicts. Neither the execution and
delivery of the Transaction Documents by Hanson North
America, nor consummation by Hanson North America of the
transactions herein or therein contemplated, nor performance
of or compliance with the terms and conditions hereof or
thereof does or will
(i) violate or conflict with any Law, or
(ii) violate, conflict with or result in a breach
of any term or condition of, or constitute a
default under, or result in (or give rise to any
right, contingent or otherwise, of any person to
cause) any termination, cancellation, prepayment
or acceleration of performance of, or result in
the creation or imposition of (or give rise to any
obligation, contingent or otherwise, to create or
impose) any Lien upon any of property of Hanson
North America pursuant to, or otherwise result in
(or give rise to any right, contingent or
otherwise, of any Person to cause) any change in
any right, power, privilege, duty or obligation of
Hanson North America under or in connection with,
(A) the articles of incorporation or by-laws
of Hanson North America,
(B) any agreement or instrument creating,
evidencing or securing any indebtedness or
guaranty to which Hanson North America is a
party or by which it or any of its respective
properties (now owned or hereafter acquired)
may be subject or bound, or
(C) any other agreement or instrument to
which Hanson North America is a party or by
which it or any of its respective properties
(now owned or hereafter acquired) may be
subject or bound,
except, in the case of clause (ii)(C), for matters that,
individually or in the aggregate, could not have a material
adverse effect on the business, financial condition or
results of operations of Hanson North America and its
subsidiaries.
(f) Title to Common Shares, Preferred Shares and
Warrants. Hanson North America is the lawful owner of the
Common Shares, Preferred Shares and Warrants, free and clear
of all Liens.
(g) Successor under Credit Agreement. Hanson North
America is the lawful ultimate assignee of HM Holdings with
respect to all of HM Holdings rights under the Credit
Agreement and the Loan Documents and with respect to the
outstanding Obligations. None of such interests have been
transferred or otherwise encumbered and no other party has
any rights with respect thereto.
(h) Lost Certificates. Neither Hanson North America
nor any of its predecessors under the Credit Agreement has
endorsed, pledged, sold, assigned or otherwise transferred
any Lost Certificate or the shares represented by the Lost
Certificate to any third party.
ARTICLE VII
Miscellaneous
7.01 Further Assurances. From and after the Closing,
at the request of Lynton Group but without cost to Hanson North
America or Millennium America, Hanson North America and
Millennium America will duly execute and deliver such other
instruments of release and discharge and take such other action
as Lynton Group reasonably may require in order to more
effectively discharge the Obligations, release all Liens on the
Collateral and surrender the Common Shares, the Preferred Shares
and the Warrants to Lynton Group.
7.02 Amendments. This Agreement may not be amended or
modified except by an instrument in writing signed by or on
behalf of all the parties hereto.
7.03 Notices. All notices, requests, demands,
directions and other communications (collectively "notices")
under this Agreement shall be in writing (including telecopied
communication) and shall be sent by first-class mail, or by
nationally-recognized overnight courier, or by telecopier (with
confirmation in writing mailed first-class or sent by such an
overnight courier), or by personal delivery. All notices shall
be sent to the applicable party at the address stated on the
signature pages hereof or in accordance with the last unrevoked
written direction from such party to the other parties hereto, in
all cases with postage or other charges prepaid. Any such
properly given notice shall be effective when received.
7.04 Severability. The provisions of this Agreement
are intended to be severable. If any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any
jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
7.05 Prior Understandings. This Agreement and the
other Transaction Documents supersede all prior and
contemporaneous understandings and agreements, whether written or
oral, among the parties hereto relating to the transactions
provided for herein and therein.
7.06 Duration; Survival. All representations and
warranties of the each party hereto contained herein or in any
other in the Transaction Document or made in connection herewith
or therewith shall survive the making of, and shall not be waived
by the execution and delivery, of this Agreement or any other
event or condition whatever.
7.07 Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on
separate counterparts each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute
but one and the same instrument.
7.08 Governing Law. THIS AGREEMENT AND ALL OTHER
TRANSACTION DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE
EXPRESSLY STATED IN SUCH OTHER TRANSACTION DOCUMENTS) SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO CHOICE OF LAW
PRINCIPLES.
7.09 No Third Party Beneficiaries. Nothing in this
Agreement shall entitle any Person other than the parties hereto
to any claim, cause of action, remedy or right of any kind.
7.10 Assignment. No party hereto shall assign this
Agreement or any part hereof without the prior written consent of
the other parties.
7.11 Timing. The transactions contemplated by this
Agreement shall be deemed to have occurred as of September 30,
1996.
IN WITNESS WHEREOF, the parties hereto, by their
officers thereunto duly authorized, have executed and delivered
this Agreement as of the date first above written.
HANSON NORTH AMERICA, INC.
By /s/Jill M. Blundon
Title: Vice President
Address for Notices:
Mack II, CIBA
581 Main Street
Woodbridge, NJ 07095
Attn: Sean Haggerty
MILLENNIUM AMERICA INC.
By /s/George H. Hempstead, III
Title Senior Vice President
Address for Notices:
99 Wood Avenue South
Iselin, NJ 08830
Attn: C. William Carmean, Esq.
LYNTON GROUP, INC.
By /s/Manus O'Donnell
Title: Vice President
Address for Notices:
9 Airport Road
Morristown Municipal Airport
Morristown, NJ 07060
Attn: Manus O'Donnell
LYNTON JET CENTRE, INC.
By /s/Manus O'Donnell
Title: Vice President
Address for Notices:
9 Airport Road
Morristown Municipal Airport
Morristown, NJ 07960
Attn: Manus O'Donnell
LYNTON PROPERTIES, INC.
By /s/Manus O'Donnell
Title: Vice President
Address for Notices:
9 Airport Road
Morristown Municipal Airport
Morristown, NJ 07960
Attn: Manus O'Donnell
EXHIBITS
EXHIBIT A Acknowledgment of Discharge of Debt and
Release
EXHIBIT B General Release of Liens
EXHIBIT C Leasehold Mortgage Termination
EXHIBIT D Assignment Termination
EXHIBIT E Receipt and Release
EXHIBIT F Lease Amendment
EXHIBIT G Jet Fuel Agreement
EXHIBIT H New Leasehold Mortgage Agreement
SCHEDULES
Schedule 2.01(d) Pledged Shares
Schedule 2.01(e) Financing Statements
Schedule 5.01(c) Lynton Opinion Matters
Schedule 6.01(e) Required Consents
EXHIBIT 99.2
LOAN AND SECURITY AGREEMENT
Dated November 13, 1996
by and between
LYNTON JET CENTRE, INC.,
a New Jersey corporation,
as Borrower,
and
FINOVA CAPITAL CORPORATION
as Lender
LOAN AND SECURITY AGREEMENT
AGREEMENT, dated as of November 13, 1996, by and between
LYNTON JET CENTRE, INC., a New Jersey corporation ("Borrower"),
having its principal place of business at 9 Airport Road,
Morristown Municipal Airport, Morristown, New Jersey 07960; and
FINOVA CAPITAL CORPORATION, a Delaware corporation ("Lender"),
having a place of business at 95 North Route 17 South, Paramus,
New Jersey 07652.
W I T N E S S E T H :
WHEREAS, Borrower has requested Lender to make a loan to
Borrower and Lender is willing to make such loan to Borrower upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally
bound hereby, the parties hereto covenant and agree as follows:
ARTICLE 1. DEFINITIONS; CONSTRUCTION
1.1 Certain Definitions.
In addition to other words and terms defined elsewhere in
this Agreement, as used herein the following words and terms have
the following meanings, respectively, unless the context hereof
otherwise clearly requires:
"Affiliate Guarantor(s)" means Ramapo Helicopters, Inc., a
New York corporation, Lynton Aviation, Inc., a New Jersey
corporation, Lynton Aviation Services, Inc., a New Jersey
corporation, and LynStar Aviation, Inc., a New York corporation,
each an affiliate of Borrower.
"Agreement" means this Loan and Security Agreement as
amended, modified or supplemented from time to time.
"Assignment Agreement" means the Assignment Agreement
(Contracts), in form and substance satisfactory to Lender,
executed by Borrower, pursuant to which Borrower assigns to
Lender and grants to Lender a first perfected Lien covering all
Contracts (as defined in Paragraph 3.16 hereof).
"Business Day" means any day other than a Saturday, Sunday
or other day on which banking institutions are authorized or
obligated to close in New Jersey or Arizona.
"Closing Date" means the date on which the parties enter
into this Agreement.
"Collateral" means all assets of Borrower in which Borrower
has granted or will grant a Lien to Lender, pursuant to this
Agreement, the Mortgage, the Assignment Agreement or otherwise,
including those assets described and defined as Collateral in
Section 6.1, Borrower's entire interest in the Premises under the
DM Lease (except as set forth in the Mortgage), the Contracts and
the Licenses.
"Constituent Documents" means the certificate of
incorporation, agreement of partnership or limited partnership,
organizational agreement, operating agreement, by-laws, or such
other similar document pursuant to which Borrower and/or
Guarantors and Lynton Properties were organized or their affairs
are governed.
"Default" means an event which with notice or lapse of time,
or both, would constitute an Event of Default.
"DM Lease" means the Amended and Restated Ground Lease
Agreement dated December 7, 1984 between D.M. Airport Developers,
Inc., as landlord and Linpro Morristown Airport Partners I, as
tenant ("Original Tenant"), as amended by First Amendment to
Amended and Restated Ground Lease dated July 16, 1985 and Second
Amendment to Amended and Restated Ground Lease dated August 14,
1990, Original Tenant's entire right, title and interest therein
being assigned to and assumed by Borrower, pursuant to the
Assignment and Assumption of Ground Lease dated August 14, 1990
between Original Tenant, as assignor and Borrower, as assignee.
"Disbursement Date" means the date on which all conditions
to the Loan are satisfied by Borrower (which shall not be later
than November 15, 1996) and the Loan proceeds are disbursed to
Borrower or to other Persons at Borrower's direction.
"EBITDA" means, for any period, on a stand-alone basis,
Borrower's earnings before interest, taxes, depreciation and
amortization of intangibles.
"EBITDA Coverage Ratio" means, with respect to Borrower, on
a stand-alone basis, as at any measurement date, for any period,
the ratio of (a) the EBITDA of Borrower, to (b) the sum of
(i) interest expense, plus (ii) the current portion of Borrower's
long term debt, plus (iii) the current portion of capitalized
lease obligations.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" means any of the Events of Default
described in Section 7.1 hereof.
"Executive Officer" means the President, the Chief Executive
Officer, or the Chief Financial Officer of Borrower elected from
time to time.
"GAAP" means generally accepted accounting principles in the
United States of America (as such principles may change from time
to time) applied on a consistent basis (except for changes in
application in which Borrower's independent certified public
accountants concur), applied both to classification of items and
amounts.
"Guaranty(ies)" means the unconditional Guaranties of the
Obligations of Borrower to Lender, executed by the Guarantors,
each in form and substance satisfactory to Lender.
"Guarantors" means the Parent Guarantor and the Affiliate
Guarantors.
"Interest Rate" means the Index Rate plus four and one-half
percent (4-1/2%). The "Index Rate" shall be the highest yield,
as published in The Wall Street Journal, on the first (1st)
Business Day preceding the Disbursement Date, for Treasury Notes
having a maturity date on or closest to the Maturity Date.
Interest shall be calculated on the basis of a year of 360 days
and twelve months of thirty (30) days each and charged on a daily
basis.
"Law" means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction,
writ, decree or award of any government or governmental agency.
"Legal Requirements" means any and all present and future
judicial, and administrative rulings or decisions, and any and
all present and future federal, state, and local laws,
ordinances, rules, regulations, permits and certificates, in each
case, in any way applicable to Borrower (or the ownership or use
of the Collateral or its other assets) and/or Guarantors and
Lynton Properties, or this transaction.
"Lien" means any mortgage, pledge, lien, security interest
(including without limitation any conditional sale or other title
retention agreement), grant of a leasehold, charge or other
encumbrance of any nature whatsoever, and also means the filing
of or the agreement to give any financing statement or analogous
document under the UCC or analogous law of any jurisdiction.
"Loan" has the meaning given to such term in Section 2.1
hereof.
"Loan Documents" means this Agreement, the Note, the
Guaranties, the Mortgage, the Assignment Agreement, the
Subordination Agreements, the Environmental Certificate with
Representations, Covenants and Warranties, the Insurance Letter
and all other agreements, instruments and documents required to
be, or which are, executed by Borrower or Guarantors or Lynton
Properties in connection with this Agreement or the Loan (as the
same may from time to time be amended, modified or supplemented).
"Lynton Properties" means Lynton Properties, Inc., a New
Jersey corporation.
"Maturity Date" has the meaning given to that term in
Section 2.7.2 hereof.
"Mortgage" means the Leasehold Mortgage, in form and
substance satisfactory to Lender, executed by Borrower, pursuant
to which Borrower will grant to Lender a first priority Lien on
and mortgage covering all of Borrower's real property interests
and improvements at the Premises, including, its interest as
lessee under the DM Lease (except as otherwise provided in the
Mortgage) and its interest as lessor under the subleases with
Borrower's tenants.
"Note" means the promissory note of Borrower executed and
delivered by Borrower under this Agreement, in substantially the
form annexed hereto as Exhibit A with the blanks appropriately
filled in.
"Obligations" means all of the indebtedness, liabilities and
obligations of every kind and nature of Borrower to Lender,
whether now existing or hereafter arising, whether or not
currently contemplated, howsoever arising, including, without
limitation, all indebtedness, liabilities and obligations arising
under, in connection with or evidenced by this Agreement, the
Note, the other Loan Documents, or otherwise.
"Office", when used in connection with Lender, means its
office located at 95 North Route 17 South, Paramus, New Jersey
07653, or such other office of Lender as may be designated in
writing from time to time by Lender to Borrower.
"Parent Guarantor" means Lynton Group, Inc., a Delaware
corporation, and the owner of all of the issued and outstanding
shares of stock of Borrower.
"Person" means an individual, corporation, national banking
association, partnership, trust, unincorporated association,
joint venture, joint-stock company, government (including
political subdivisions), governmental authority or agency, or any
other entity.
"Plan" means any employee benefit plan which is covered by
ERISA and which is maintained by Borrower or, in the case of a
plan to which more than one employer contributes, to which
Borrower made contributions at any time within the five plan
years preceding the date of termination.
"Premises" means the premises demised and leased under the
DM Lease, excluding the premises demised by Borrower pursuant to
a certain Ground Lease Agreement between Borrower and Lynton
Properties, Inc. dated June 21, 1994.
"Subordination Agreement(s)" means the Subordination
Agreements, each in form and substance satisfactory to Lender,
executed by Lynton Properties and the Guarantors, pursuant to
which all of the indebtedness, liabilities and obligations of
Borrower to Lynton Properties and the Guarantors are subordinated
to the due payment and performance of the Obligations, to the
extent set forth in the Subordination Agreements.
"Subordinated Debentures" means the 10% Senior Subordinated
Convertible Debentures due December 31, 1998 issued by Parent
Guarantor in the original aggregate face principal amount of
$2,500,000.
"Subordinated Debenture Documents" means the Indenture dated
as of December 21, 1993 between Parent Guarantor and American
Stock Transfer & Trust Company, as Trustee, the Subordinated
Debentures and all agreements, instruments and documents executed
in connection therewith, as the same have been amended, modified
or supplemented.
"Tangible Net Worth" means, with respect to Borrower, on a
stand-alone basis, (a) the excess of the total assets of Borrower
over its total liabilities computed in accordance with GAAP,
minus (b) all intangible assets of Borrower, including, without
limitation, goodwill, tradenames, trademarks, patents and
copyrights, but excluding debt acquisition costs.
"Term" means the period beginning on the Disbursement Date
and ending on the Maturity Date.
"UCC" means the Uniform Commercial Code as adopted in the
State of New Jersey.
1.2 General Interpretive Principals.
For purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise
requires:
(i) any pronoun used shall be deemed to cover
both gender forms as well as the neuter form;
(ii) all references to the plural shall include
the singular, the singular the plural and the part the whole;
(iii) the word "or" has the inclusive meaning
frequently identified by the phrase "and/or";
(iv) accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP;
(v) the words "herein", "hereunder" and
"hereof" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this
Agreement;
(vi) references herein to "Articles",
"Sections", "Subsections", "Paragraphs", and other subdivisions
without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(vii) a reference to a Subsection without further
reference to a Section is a reference to such Subsection as
contained in the same Section in which the reference appears, and
this rule shall also apply to Paragraphs and other subdivisions;
(viii) the term "include" or "including" shall
mean, without limitation, by reason of enumeration; and
(ix) the term "satisfactory to Lender" or
"satisfaction of the Lender" or "satisfaction to counsel" or
other similar terms means satisfactory to Lender or its counsel
in its sole and absolute discretion.
ARTICLE 2. THE CREDIT
2.1 The Loan.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, Lender agrees to
make a Loan to Borrower in the principal amount of Four Million
Dollars ($4,000,000) (the "Loan").
2.2 Use of Proceeds.
The proceeds of the Loan shall be used by Borrower solely
for the following purposes: (a) $3,500,000 to repay all of
Borrower's remaining indebtedness to H.M. Holdings, Inc. ("HM"),
and (b) $500,000 for Borrower's working capital.
2.3 The Note.
The obligation of Borrower to repay the Loan and to pay
interest thereon shall be evidenced by the Note. The Note shall
be dated the Closing Date and shall be executed by Borrower and
delivered to Lender on the Closing Date.
2.4 Disbursement.
Subject to the conditions set forth herein, Lender shall, on
the Disbursement Date, credit, by wire transfer, the amount of
the Loan to the account of Borrower or the Person or Persons
specified in writing by Borrower.
2.5 Loan Account.
Lender shall maintain a loan account on its books in the
name of Borrower for the Loan in which will be recorded all
payments of principal thereof and all accruals and payments of
interest thereon. The entries in the loan account (in the
absence of error in the making thereof) shall be conclusive
evidence of the outstanding principal thereof and accrued
interest thereon from time to time. Lender shall provide
Borrower with statements of said account from time to time on
request.
2.6 Interest Rates.
2.6.1 Interest Prior to Maturity. Prior to maturity
(whether by acceleration or otherwise) the unpaid principal
amount of the Loan shall bear interest at the Interest Rate.
2.6.2 Interest After Maturity. Commencing with the
day after the principal amount of any part of the Loan shall have
become due and payable (by acceleration or otherwise), such part
of the Loan or the entire Loan (as the case may be) shall bear
interest at the daily rate of four percent (4%) per annum above
the Interest Rate (the "Default Rate").
2.6.3 Maximum Rate. Lender and Borrower intend the
Loan Documents to comply in all respects with all provisions of
Law and not to violate, in any way, any legal limitations on
interest charges. Accordingly, if, for any reason, Borrower is
required to pay, or has paid, interest at a rate in excess of the
highest rate of interest which may be charged by Lender or which
Borrower may legally contract to pay under applicable law (the
"Maximum Rate"), then the Interest Rate shall be deemed to be
reduced, automatically and immediately, to the Maximum Rate, and
interest payable hereunder shall be computed and paid at the
Maximum Rate and the portion of all prior payments of interest in
excess of the Maximum Rate shall be deemed to have been
prepayments of the outstanding principal of the Loan and applied
to the installments in the inverse order of their maturities.
2.7 Payments.
2.7.1 Time; Place; Manner. All payments to be made
in respect of principal, interest, or other amounts due from
Borrower hereunder or under the Note shall become due at
3:00 p.m., New Jersey time, on the day when due without
presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived. Such payments shall be made to
Lender in lawful money of the United States of America in
immediately available funds.
2.7.2 Payments of Principal and Interest. The Loan,
together with interest thereon at the Interest Rate, shall be
repaid in ninety-six (96) equal consecutive monthly payments
consisting of (a) principal and interest calculated at the
Interest Rate each in an amount which will fully amortize sixty-five percent
(65%) of the Loan at the Interest Rate over the Term
plus (b) interest on thirty-five percent (35%) of the Loan
calculated at the Interest Rate. The remaining unpaid principal
balance of the Loan, plus all accrued and unpaid interest on the
Loan calculated at the Interest Rate shall be payable with the
ninety-sixth (96th) payment on the Maturity Date. The first such
monthly payment of principal and interest shall be due and
payable on the first day of the second month succeeding the
Disbursement Date and the payments shall continue on a like day
in each and every month thereafter through and including the
Maturity Date; provided that (i) if the Disbursement Date is the
first day of a month, the first such monthly payment of principal
and interest shall be due on the first day of the immediately
succeeding month, and (ii) if the Disbursement Date is not the
first day of the month, Borrower shall pay, on the first day of
the month immediately succeeding the Disbursement Date, interest
only, at the Interest Rate, from the Disbursement Date to the
last day of the month in which the Disbursement Date occurs.
Lender shall compute the amount of each payment and advise
Borrower of such amount. Each monthly payment shall be applied,
first to fees, costs and charges, if any, owing to Lender, then
to interest as may be due hereunder, and the balance of such
payment shall be applied to the principal balance of the Loan.
The entire unpaid principal balance which was not payable
earlier, whether due to regularly scheduled payments,
acceleration or otherwise, together with any unpaid interest,
fees, costs and charges shall be due and payable on the Maturity
Date. The Maturity Date shall be the date that the ninety-sixth
(96th) consecutive monthly installment is scheduled to be due.
After the maturity of all or any part of the Loan (by
acceleration or otherwise), interest on the Loan or such part
thereof shall be due and payable at the Default Rate on demand.
2.7.3 Net Payments. All payments hereunder and under
the Note shall be made by Borrower to Lender without defense,
set-off, claim or counterclaim and without deduction for any
present or future income, stamp or other taxes, levies, imposts,
deductions, charges or withholdings whatsoever imposed, assessed,
levied or collected by or for the benefit of any jurisdiction or
taxing authority. In addition, Borrower shall pay any and all
taxes (stamp or otherwise) payable or determined to be payable in
connection with the execution and delivery of this Agreement, the
Note and the other Loan Documents and on all payments to be made
by Borrower hereunder and under the Note and the other Loan
Documents (other than the Lender's income taxes) and all taxes
payable in connection with or related to the Collateral.
2.8 Prepayments.
So long as there is no Default or Event of Default hereunder
or under any of the other Loan Documents, Borrower shall have the
right, upon not less than ten (10) days prior written notice to
Lender, on any regularly scheduled payment date, to prepay the
outstanding principal balance of the Loan in whole, but not in
part, provided that Borrower shall pay to Lender, together with
the principal balance of the Loan, (i) all accrued and unpaid
interest on the amount prepaid through the date of prepayment,
(ii) all outstanding fees, charges and other amounts then due
under the Loan Documents, and (iii) a prepayment fee in an amount
equal to the product of (A) the outstanding principal balance of
the Loan at the time of prepayment, times (B) the applicable
percentage set forth opposite the year of the Term in which the
prepayment is made, as set forth below:
Year of Term of Loan in
Which Prepayment is Made Percentage
1 3%
2 3%
3 2%
4 2%
5 1%
6 and thereafter 0%
Any acceleration of the Loan as a consequence of the occurrence
of an Event of Default shall be presumed to be a mechanism to
avoid the requirements of this provision and shall be deemed a
prepayment and subject to the appropriate prepayment premium set
forth above, in addition to all other amounts otherwise due under
this Agreement and the other Loan Documents; provided that the
administrative costs set forth in Section 2.9 hereof shall not be
due.
2.9 Administrative Costs.
If Borrower shall fail to make any payment of principal or
interest within twelve (12) days after the same is due, Borrower
shall pay a late charge of five percent (5%) of the unpaid
amounts, but in no event greater than the maximum rate permitted
by law, and such amount shall be payable upon demand. Such
payment is not interest for the use of money, but is solely to
cover Lender's administrative costs occasioned by such delay.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
3.1 Organization and Qualification.
Borrower is duly organized, validly existing and in good
standing as a corporation under the Laws of the State of New
Jersey with full power and authority to own its properties and to
transact its business as now transacted and as contemplated to be
transacted. Borrower is qualified and in good standing to
transact business in each jurisdiction where the ownership of its
properties or the transaction of its business requires such
qualification. Each Guarantor and Lynton Properties is duly
organized, validly existing and in good standing as a corporation
under the Laws of the State of its incorporation with full power
and authority to own its properties and to transact its business
as now transacted and as contemplated to be transacted. Each
Guarantor and Lynton Properties is qualified and in good standing
to transact business in each jurisdiction where the ownership of
its properties or the transaction of its business requires such
qualification.
3.2 Authority and Authorization.
Borrower has full power and authority to execute, deliver
and carry out the provisions of this Agreement, the Note and the
other Loan Documents to which it is a party, to borrow hereunder
and under the other Loan Documents and to create the Liens
provided for herein, and to perform its obligations hereunder and
thereunder, and all such action has been duly and validly
authorized by all necessary proceedings on its part. Each
Guarantor and Lynton Properties has full power and authority to
execute, deliver and carry out the provisions of its Guaranty and
the other Loan Documents to which it is a party and to perform
its obligations thereunder, and all such action has been duly and
validly authorized by all necessary proceedings on its part.
3.3 Execution and Binding Effect.
This Agreement, the Note and the other Loan Documents have
been duly and validly executed and delivered by Borrower and
constitute the legal, valid and binding obligation of Borrower
enforceable in accordance with their respective terms. The
Guaranties and the other Loan Documents executed by Guarantors
have been duly and validly executed and delivered by the
Guarantor party thereto and each constitutes the legal, valid and
binding obligation of such Guarantor, enforceable in accordance
with their respective terms. The Subordination Agreement and the
other Loan Documents executed by Lynton Properties have been duly
and validly executed and delivered by Lynton Properties and each
constitutes the legal, valid and binding obligation of Lynton
Properties, enforceable in accordance with their respective
terms.
3.4 Authorizations and Filings.
Except for the filing of UCC financing statements and the
recordation of the Mortgage with the Clerk of Morris County, New
Jersey, no authorization, consent, approval, license, exemption
or other action by, and no registration, qualification,
designation, declaration or filing with, any governmental
authority is or will be necessary in connection with the
execution and delivery of this Agreement, the Note, the
Guaranties, the Mortgage, the Subordination Agreements, the other
Loan Documents or the consummation by Borrower, Guarantors and
Lynton Properties of the transactions herein and therein
contemplated, or performance by Borrower, Guarantors and Lynton
Properties of or compliance by Borrower, Guarantors and Lynton
Properties with, the terms and conditions hereof or thereof.
3.5 Absence of Conflicts.
Neither the execution and delivery of this Agreement, the
Note, the Guaranties or the other Loan Documents, nor
consummation of the transactions herein or therein contemplated
nor performance of, or compliance with the terms and conditions
hereof or thereof will (a) result in any violation or breach of
(i) the provisions of Borrower's or any Guarantor's or Lynton
Properties's Constituent Documents, or (ii) any Law, or the
order, rule or regulation of any court or governmental agency or
body having jurisdiction over Borrower or Guarantors or Lynton
Properties, or any of their respective properties, or (iii) any
agreement, bond, note, instrument or indenture to which Borrower
or any Guarantor or Lynton Properties is a party or pursuant to
which any of their respective properties are affected, or
(b) result in the creation or imposition of any Lien upon any
property (now owned or hereafter acquired) of Borrower or
Guarantors or Lynton Properties, except for the Lien created by
this Agreement.
3.6 Financial Statements.
Borrower and Parent Guarantor have heretofore furnished to
Lender certain historical financial statements (the "Financial
Statements") and projected pro forma financial information (the
"Financial Information"). Such Financial Statements (including
the notes thereto) present fairly the financial condition of
Borrower and the Parent Guarantor as of the dates of the balance
sheets contained therein, and the results of their respective
operations for the periods then ended, all in conformity with
GAAP on a basis consistent with that of Financial Statements for
corresponding prior periods. The Financial Information presents
to the best of Borrower's knowledge and belief the expected
financial results for the periods projected and include estimates
and assumptions considered reasonable at the time these forecasts
were made. Except as disclosed therein, neither Borrower nor
Guarantors nor Lynton Properties have any material contingent
liabilities (including liabilities for taxes), unusual forward or
long-term material commitments or unrealized or anticipated
losses from unfavorable commitments.
3.7 No Defaults.
There is no Default under the Loan Documents.
3.8 Litigation.
There is no pending or threatened claim or proceeding by or
before any court or governmental agency against or affecting
Borrower or Guarantors or Lynton Properties which, if adversely
decided would have a material adverse effect on the business,
operations or financial condition of Borrower or Guarantors or
Lynton Properties or on the ability of Borrower or Guarantors or
Lynton Properties to perform their respective obligations under
this Agreement, the Note or the other Loan Documents or on the
Collateral.
3.9 Title to Collateral.
Borrower has good title to all of its assets, including,
without limitation, the Collateral and all assets reflected in
the most recent balance sheet referred to in Section 3.6 hereof,
free and clear of all Liens covering the Collateral, other than
the Liens granted hereunder to Lender covering the Collateral,
which are and will at all times be first perfected Liens covering
the Collateral, except Permitted Liens.
3.10 Taxes.
All tax returns required to be filed by Borrower have been
properly prepared, executed and filed. All taxes, assessments,
fees and other governmental charges upon Borrower or upon any of
its properties, incomes, sales or franchises which are due and
payable have been paid.
3.11 Financial Accounting Practices.
Borrower makes and keeps books, records and accounts which,
in reasonable detail, accurately and fairly reflect Borrower's
transactions and dispositions of its assets.
3.12 Power To Carry On Business.
Borrower, Guarantors and Lynton Properties have all
requisite power and authority to own and operate their respective
properties and to carry on their businesses as now conducted and
as presently planned to be conducted.
3.13 No Material Adverse Change.
Since the date of the Financial Statements referred to in
Section 3.6, there has been no material adverse change in the
business, operations or financial condition of Borrower or
Guarantors or Lynton Properties.
3.14 Compliance with Laws.
Neither Borrower nor Guarantors nor Lynton Properties are in
violation of any Law, except for violations which in the
aggregate do not have a material adverse effect on the business,
operations or financial condition of Borrower or any Guarantor or
Lynton Properties or on the Collateral.
3.15 Licenses.
There are no licenses, permits, waivers, exemptions,
authorizations, consents or approvals required by any
governmental agencies or others for Borrower to own and/or
operate Borrower's business as presently conducted and presently
contemplated to be conducted ("Licenses").
3.16 Contracts.
Borrower has delivered to Lender true and correct copies of
all agreements and contracts entered into in connection with the
operation of its business ("Contracts"), including the Exxon
Avitat Agreement effective November 1, 1994, entered into with
Exxon Corporation. Borrower is in compliance with all of the
terms and conditions of the Contracts. To the best of Borrower's
knowledge, no other party to any of the Contracts is in default
thereunder.
3.17 Leases.
Borrower has delivered to Lender true and correct copies of
the DM Lease, the Lease between DM and The Town of Morristown,
New Jersey (the "Morristown Lease") and all leases with
subtenants of Borrower (collectively, the "Leases"). The DM
Lease grants Borrower the right to possess the Premises and to
operate its business at the Premises for the entire term set
forth therein. Borrower is in compliance with all of the terms
and conditions of the DM Lease and all other such leases. To the
best of Borrower's knowledge, no other party to any such leases
(including, without limitation, DM) is in default under any such
lease.
3.18 Compliance with Agreements.
Neither Borrower nor any Guarantor nor Lynton Properties is
in default under any agreement, bond, note, indenture or
contract, except for defaults which in the aggregate do not have
a material adverse effect on the business, operation or financial
condition of Borrower or any Guarantor or Lynton Properties or on
the Collateral.
3.19 Accurate and Complete Disclosure.
No representation or warranty made by Borrower in this
Agreement and no statement made by Borrower or any Guarantor or
Lynton Properties in the Financial Statements furnished pursuant
to Section 3.6 hereof or otherwise, or any certificate, report,
exhibit or document furnished by Borrower or any Guarantor or
Lynton Properties to Lender pursuant to or in connection with
this Agreement or the Loan is false or misleading in any material
respect (including by omission of material information necessary
to make such representation, warranty or statement not
misleading).
3.20 Regulations G and U.
Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying "margin stock", as such
term is used in Regulations G or U promulgated by the Board of
Governors of the Federal Reserve System as amended from time to
time. No part of the proceeds of the Loan will be used to
purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any "margin stock".
Borrower does not own any "margin stock".
3.21 Perfection.
Except for the filings under Article 9 of the UCC specified
in Section 4.7 hereof (and continuation statements at periodic
intervals) and the recordation of the Mortgage with the Clerk of
Morris County, New Jersey, no further filing or recording is
necessary under the UCC or under any other Laws of any
jurisdiction, in order to perfect in all applicable jurisdictions
the Liens of Lender in the Collateral. Upon such filings, Lender
will be granted a first perfected Lien covering the Collateral.
There are no other Liens covering the Collateral.
3.22 Place of Business.
Both the place of business (or chief executive office if
there is more than one place of business) of Borrower and the
place where it keeps its corporate records concerning the
Collateral and all of its interest in, to and under this
Agreement are located at the address set forth at the beginning
of this Agreement.
3.23 Location of Collateral.
For all purposes, including, without limitation, perfection
of security interests therein under Article 9 of the UCC, the
Collateral is deemed located and at all times shall be located at
the Premises.
ARTICLE 4. CONDITIONS OF LENDING
The obligation of Lender to make the Loan hereunder is
subject to the accuracy in all material respects, as of the date
hereof and the Disbursement Date, of the representations and
warranties herein contained, to the performance by Borrower of
its obligations to be performed hereunder on or before such
Disbursement Date and to the satisfaction of the following
further conditions. If all conditions contained herein are not
satisfied by November 15, 1996, Lender shall have no obligation
whatsoever to make the Loan and shall have no liability for its
refusal to do so.
4.1 Representations and Warranties.
The representations and warranties contained in Article 3
hereof shall be true on the Closing Date and on and as of the
Disbursement Date with the same effect as if made on and as of
such date, and on such dates no Default or Event of Default shall
have occurred and be continuing or exist or shall occur or exist
after giving effect to the Loan.
4.2 Corporate Action.
On the Closing Date, Borrower shall deliver to Lender a
certificate in form and substance satisfactory to Lender, dated
the Closing Date, signed by a duly authorized officer of
Borrower, certifying as to (a) true copies of the Constituent
Documents of Borrower and Parent Guarantor, all as in effect on
such date, (b) true copies of all action taken by Borrower,
Guarantors and Lynton Properties relative to this Agreement, the
Note and the other Loan Documents, and (c) the names, true
signatures and incumbency of the officer or officers of Borrower,
Guarantors and Lynton Properties authorized to execute and
deliver this Agreement, the Note and the other Loan Documents on
behalf of Borrower, Guarantors and Lynton Properties (and Lender
may conclusively rely on such certificate unless and until a
later certificate revising the prior certificate has been
furnished to Lender). Borrower shall also deliver to Lender good
standing certificates for Borrower and Parent Guarantor issued by
the Secretary of State of its State of incorporation and each
state in which it is required by Law to be qualified.
4.3 Opinion of Counsel.
On the Closing Date, Lender shall have received a favorable
written opinion of counsel for Borrower, Guarantors and Lynton
Properties, dated the Closing Date and in form and substance
satisfactory to Lender and its counsel, Winick & Rich, P.C.
4.4 No Change of Law or Facts.
No change shall have occurred after the date of execution
and delivery of this Agreement in applicable Law or regulations
thereunder or interpretations thereof by appropriate regulatory
authorities which, in the opinion of Lender or its counsel, would
make it illegal for Lender to acquire the Note, make the Loan, or
otherwise to participate in the Loan, nor shall any facts come to
the attention of Lender, concerning Borrower, its business or
financial condition which, in the opinion of Lender would
increase the risk to Lender of repayment of the Loan by Borrower.
4.5 Documents.
The following documents shall have been duly authorized,
executed and delivered by the respective party or parties
thereto, shall be in form and substance satisfactory to Lender
and its counsel and shall be in full force and effect on the
Closing Date and on the Disbursement Date, and an executed
counterpart of each thereof shall have been delivered to Lender
and its counsel:
4.5.1 this Agreement;
4.5.2 the Note;
4.5.3 the Guaranties;
4.5.4 the Mortgage;
4.5.5 the Assignment Agreement;
4.5.6 insurance certificates or policies of
insurance evidencing the coverages required
by Section 5.3 hereof;
4.5.7 the Subordination Agreements; and
4.5.8 all other Loan Documents, if any.
4.6 Collateral.
Borrower shall provide to Lender a complete description of
the Collateral, together with evidence, in form and substance
satisfactory to Lender in its sole discretion, that Borrower owns
legal title to the Collateral, free and clear of all Liens.
4.7 Financing Statements.
On the Closing Date, UCC financing statements covering the
security interest created by this Agreement in the Collateral
shall have been duly filed in the office of the Secretary of
State of the State where the Collateral is located (i.e. New
Jersey) and in all other places as, in the opinion of Lender, or
its counsel, are necessary or desirable to perfect such Liens.
4.8 Licenses and Permits.
All appropriate action shall have been taken prior to the
Closing Date in order to permit consummation of the transactions
contemplated herein and hereby and enforcement of all of the
terms hereof and thereof, and all licenses, permits, waivers,
exemptions, authorizations and approvals required (or, in the
opinion of Lender or its counsel, advisable) to be in effect on
the Closing Date shall have been issued and shall be in full
force and effect on such date, and copies thereof shall have been
delivered to Lender.
4.9 Subordinated Debenture Documents.
4.9.1 Borrower shall have delivered to Lender true and
correct copies of the Subordinated Debenture Documents, the terms
of which shall be satisfactory to Lender, together with a
certificate executed by the Trustee thereof to the effect that
Parent Guarantor is in compliance with all of the terms and
conditions thereof.
4.9.2 HM shall have surrendered its entire equity
interest in Parent Guarantor and agreed to reduce the
indebtedness of Borrower and Parent Guarantor to HM to $3,500,000
(the "Stage One Restructuring"), which sum will be repaid in full
from the proceeds of the Loan.
4.9.3 Borrower shall have delivered to Lender evidence
satisfactory to Lender that Paul R. Dupee, Jr. ("Dupee") is the
beneficial holder of the face amount of $445,000 of principal of
the Subordinated Debentures, and Nigel D. Pilkington
("Pilkington") is the beneficial holder of the face amount of
$620,000 of principal of the Subordinated Debentures, and a true
and correct copy of the agreement executed by Parent Guarantor
with Dupee and Pilkington, pursuant to which they agree to redeem
all of their Subordinated Debentures in exchange for issuance by
Parent Guarantor to them of common stock of Parent Guarantor (the
"Stage Two Restructuring"), following consummation of the Stage
One Restructuring, together with evidence that such individuals
have the authority and power to enter into such agreement and
that such agreement is enforceable.
4.9.4 Borrower shall have delivered to Lender evidence
satisfactory to Lender that Borrower has redeemed not less than
$540,000 of principal of the Subordinated Debentures, and that
such redemption, together with the redemption under the Stage Two
Restructuring satisfies the sinking fund obligations of Borrower
under the Subordinated Debenture Documents for calendar years
1996 and 1997, except for approximately $62,000.
4.10 Other Matters.
4.10.1 Lender shall have received all other
agreements, instruments, financing statements, certificates,
waivers, searches, releases, searches, terminations, reports,
confirmations, corporate or other action, opinion letters,
evidence of delivery and acceptance of the Collateral, evidence
of payment of obligations, evidence of ownership of the
Collateral and all other agreements, instruments and documents as
Lender or its counsel shall have requested (each in form and
substance satisfactory to the Lender and its counsel), including,
without limitation, certificates of incorporation and by-laws,
UCC-1 financing statements, acknowledgments from other lenders,
copies of the DM Lease, the Morristown Lease and all other Leases
relating to the Premises, copies of all Contracts, copies of all
Licenses, Environmental Certificate with Representations,
Covenants and Warranties, title insurance reports and policies,
lien waivers, credit references, consents, approvals,
authorization to date documents, casualty and liability insurance
policies and endorsements related to such insurance, satisfactory
environmental audits and other environmental information and
certificates, appraisals, surveys and financial statements and
other financial information.
4.10.2 There shall be no Default hereunder or under
the other Loan Documents.
4.10.3 All legal matters incident to the Loan shall be
satisfactory to Lender and its counsel.
ARTICLE 5. COVENANTS
Borrower covenants that from and after the date hereof and
until payment in full of the Note and interest thereon and all
other amounts due from Borrower hereunder or under the Note or
the other Loan Documents, unless Lender shall otherwise consent
in writing:
5.1 Reporting and Information Requirements.
5.1.1 Annual Consolidated Financial Statements. As
soon as practicable, and in any event within one hundred five
(105) days after the close of each fiscal year of the Parent
Guarantor, Borrower shall furnish to Lender Parent Guarantor's
annual consolidated audit reports for such year on a consolidated
basis, including audited consolidated statements of income,
retained earnings and changes in financial position of Parent
Guarantor for such fiscal year and audited consolidated balance
sheets of Parent Guarantor as of the close of such fiscal year,
and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the preceding
fiscal year where such presentation is appropriate under GAAP,
certified by Grant Thornton LLP or other independent certified
public accountants of recognized standing selected by Parent
Guarantor and reasonably satisfactory to Lender, together with
(or included in such certification) a written statement of such
accountants substantially to the effect that (i) such accountants
examined such financial statements in accordance with generally
accepted auditing standards and accordingly made such tests of
accounting records and such other auditing procedures as they
considered necessary in the circumstances and (ii) in the opinion
of such accountants such financial statements present fairly the
consolidated financial position of Parent Guarantor as of the end
of such fiscal year and the results of their consolidated
operations and the changes in their consolidated financial
position for the fiscal year then ended, in conformity with GAAP
applied on a basis consistent with that of the preceding fiscal
year (except for changes in application in which such accountants
concur). All such financial statements shall be in form
satisfactory to Lender.
5.1.2 Annual Stand-Alone Financial Statements. As
soon as practicable, and in any event within one hundred five
(105) days after the close of each fiscal year of Borrower,
Borrower shall furnish to Lender, a copy of its unaudited
stand-alone financial statements of the type described in Section 5.1.1
above, certified by the Chief Financial Officer of Borrower or if
Borrower chooses, audited, as set forth in Section 5.1.1 above.
All such financial statements shall be in form satisfactory to
Lender.
5.1.3 Quarterly Financial Statements. Within fifty
(50) days after the end of each of the first three fiscal
quarters of each fiscal year, Borrower and Parent Guarantor shall
furnish to Lender, a copy of their respective interim financial
statements of the type described in Section 5.1.1 above,
certified by the Chief Financial Officer of Borrower or if
Borrower chooses, audited, as set forth in Section 5.1.1 above.
All such financial statements shall be in form satisfactory to
Lender.
5.1.4 Further Requests. Borrower will promptly furnish
to Lender such other information (financial or otherwise)
concerning Borrower, its assets or the Collateral as Lender may
reasonably request from time to time.
5.1.5 Compliance Certificates. At the same time
Borrower delivers the financial statements required under the
provisions of paragraphs 5.1.1 and 5.1.2, Borrower shall furnish
to Lender a certificate of an Executive Officer to the effect
that no Default or Event of Default exists, or, if such cannot be
so certified, specifying in reasonable detail the exceptions, if
any, to such statement. Such certificate shall be accompanied by
a detailed calculation indicating compliance with Paragraph 5.14
hereof.
5.1.6 Notice of Event of Default. Promptly upon
becoming aware of any Default or Event of Default, Borrower shall
give Lender notice thereof, together with a written statement of
a Chief Executive Officer of Borrower setting forth the details
thereof and any action with respect thereto taken or contemplated
to be taken by Borrower.
5.1.7 Notice of Material Proceedings. Promptly upon
becoming aware thereof Borrower shall give Lender written notice
of the commencement, existence or threat of any proceeding by or
before any court or administrative agency against or affecting
Borrower, Guarantors, Lynton Properties, or the Collateral which,
if adversely decided, would have a material adverse effect on the
business, operations or financial condition of Borrower or
Guarantors or Lynton Properties or on the ability of Borrower or
Guarantors or Lynton Properties to perform their obligations
under this Agreement, the Note, or the other Loan Documents or on
the Collateral.
5.1.8 Visitation. Borrower shall permit such persons
as Lender may designate to visit and inspect the Collateral and
to examine the books and records of Borrower and take copies and
extracts therefrom, and to discuss its affairs with officers of
Borrower and its independent accountants, at such reasonable
times and as often as Lender may reasonably request; provided
that, so long as there is no Event of Default, such visitations
and examinations shall be upon prior notice to Borrower, during
normal business hours and no more frequently than twice during
each calendar year.
5.2 Preservation of Existence and Franchises.
5.2.1 Neither Borrower nor Guarantors nor Lynton
Properties shall enter into any merger, reorganization or
consolidation, or wind up, liquidate or dissolve, nor agree to do
any of the foregoing.
5.2.2 Borrower will qualify to do business and will
remain in good standing under the laws of each jurisdiction in
which it is required to be qualified by reason of the location of
the properties owned or leased by it or the conduct of its
business.
5.2.3 Borrower will comply with all Laws relative to
the conduct of its business or the location of the properties
owned or leased by it, the non-compliance with which could have a
material adverse effect on the business, operations, assets or
financial or other condition of Borrower, as contemplated hereby,
or the ability of Borrower to perform its obligations under this
Agreement, the Note, or the other Loan Documents and will obtain
or cause to be obtained as promptly as possible any permit,
license, consent, privilege or approval of any governmental
authority and make any filing or registration therewith which at
the time shall be required with respect to the performance of its
obligations under this Agreement, the Note or the other Loan
Documents or for the operation of its business as presently
conducted or as contemplated by it.
5.2.4 Borrower shall not (a) convey, assign, sell,
mortgage, encumber, pledge, hypothecate, grant a security
interest in, grant options with respect to, lease or otherwise
dispose of all or any part of any legal or beneficial interest in
any part or all of the Collateral or any interest therein, except
as otherwise permitted herein; or (b) and Parent Guarantor shall
not, directly or indirectly sell, assign, lease or otherwise
dispose of or permit the sale, assignment or other disposition of
any legal or beneficial interest in the stock or other ownership
interest of any corporation or other entity which is Borrower or
is a beneficial owner of the Collateral; or (c) convey, assign,
transfer or otherwise dispose of a material portion of its assets
(other than the Collateral, the prohibition on transfer of which
is governed by subparagraph (a) above).
5.3 Insurance.
Borrower shall, at its own expense, maintain and deliver
evidence to Lender of such insurance required by Lender, written
by insurers and in amounts satisfactory to Lender.
5.4 Maintenance of Properties.
Borrower shall maintain or cause to be maintained in good
repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by it, including
the Collateral, and shall make or cause to be made all needful
and proper repairs, renewals, replacements and improvements
thereto so that the business carried on in connection therewith
may be properly and advantageously conducted at all times, all as
in the reasonable judgment of Lender may be necessary so that
Borrower's business as presently now carried on in connection
therewith may continue to be properly and advantageously
conducted at all times; provided, however, that nothing in this
Section shall prevent Borrower from discontinuing maintenance of
any of the Collateral if such discontinuance is commercially
reasonable, does not in the aggregate materially adversely affect
the business of Borrower or its ability to satisfy the
Obligations and does not otherwise create or cause an Event of
Default.
5.5 Payment of Taxes and Other Potential Charges.
Borrower shall pay or discharge
5.5.1 all taxes, assessments and other governmental
charges or levies imposed upon it or any of its properties,
including the Collateral, or income (including such as may arise
under ERISA or any similar provision of law), on or prior to the
date on which penalties attach thereto; and
5.5.2 all lawful claims of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons which,
if unpaid, might result in the creation of a Lien upon any such
property, on or prior to the date when due;
provided, that unless and until foreclosure, distraint, levy,
sale or similar proceedings shall have been commenced, Borrower
need not pay or discharge any such tax, assessment, charge, levy,
claim or current liability so long as (i) the validity thereof is
contested in good faith and by appropriate proceedings diligently
pursued, (ii) in Lender's sole judgment there is no reasonably
foreseeable risk of forfeiture of the Collateral, and (iii) such
reserves or other appropriate provisions as may be required by
GAAP shall have been made therefor, and so long as such failure
to pay or discharge does not have a material adverse effect on
the business, operations or financial condition of Borrower or on
the Collateral.
5.6 Financial Accounting Practices.
Borrower shall make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect its
business, including all transactions and dispositions of its
assets, all prepared in accordance with GAAP. Lender and/or its
agents shall have the right to review the books and records of
Borrower and to photocopy the same and to make excerpts
therefrom; provided that, so long as there is no Event of
Default, such visitations and examinations shall be upon prior
notice to Borrower, during normal business hours and no more
frequently than twice during each calendar year.
5.7 Compliance with Laws.
Borrower shall comply with all applicable Laws in all
respects, provided, that Borrower shall not be deemed to be in
violation of this Section 5.7 as a result of any failures to
comply which would not result in fines, penalties, injunctive
relief or other civil or criminal liabilities which, in the
aggregate, would not materially affect the business or operations
of Borrower or the ability of Borrower to perform its obligations
under this Agreement, the Note or the other Loan Documents or the
Collateral.
5.8 Material Obligations.
Borrower shall pay and satisfy, when due, all material
liabilities and obligations, including, without limitation, all
obligations under all leases (real or personal property) to which
it is a party.
5.9 Maintenance of Collateral.
Borrower will maintain and preserve the Collateral in good
condition, repair and working order, promptly repairing,
replacing or rebuilding any part of the Collateral which may be
destroyed by any casualty, or become damaged, worn or
dilapidated, all as in the reasonable judgment of Lender may be
necessary so that Borrower's business as presently now carried on
in connection therewith may continue to be properly and
advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent Borrower from discontinuing
maintenance of any of the Collateral if such discontinuance is
commercially reasonable, does not in the aggregate materially
adversely affect the business of Borrower or its ability to
satisfy the Obligations and does not otherwise create or cause an
Event of Default.
5.10 Maintenance of Principal Place of Business.
Borrower shall maintain and keep its principal place of
business and chief executive office at the address set forth at
the beginning of this Agreement, and at no other location without
giving Lender at least thirty (30) days prior written notice of
any move. Borrower shall maintain and keep its records at such
address and at no other location without giving Lender at least
thirty (30) days prior written notice of any move.
5.11 Amendments to Documents.
Borrower shall not amend, modify or alter any of its
Constituent Documents in any manner which will materially
adversely affect Borrower's ability to satisfy the Obligations or
materially adversely affect the Collateral.
5.12 Dividends, Distributions.
Borrower shall not declare, make or pay any dividends,
distributions or other payments of any kind to Parent Guarantor
or any affiliates of Borrower, if there is a Default or there
would be a Default after giving effect to any such proposed
dividend, distribution or other payment.
5.13 Indebtedness.
Borrower shall not create, incur, permit to exist or have
outstanding any indebtedness (including all indebtedness
guaranteed by Borrower or otherwise with respect of which
Borrower shall have liability), except (a) indebtedness of
Borrower to Lender under this Agreement and the other Loan
Documents, (b) indebtedness of Borrower for trade account
payables incurred in the ordinary course of Borrower's business,
(c) indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section
5.5 hereof, (d) indebtedness in respect of judgments or awards in
accordance with and not to exceed the amount permitted under the
provisions of Section 7.1.16 hereof, (e) so long as no Event of
Default shall exist or would exist after giving effect thereto,
indebtedness for borrowed money, under capitalized lease
obligations or for the acquisition of any real or personal
property not to exceed $100,000 in the aggregate during any
fiscal year, (f) so long as no Event of Default shall exist or
would exist after giving effect thereto, indebtedness to any
Affiliate Guarantor, Lynton Properties or the Parent Guarantor,
and (g) indebtedness guaranteed by Borrower under that certain
Guaranty Agreement dated June 22, 1994 in favor of Connecticut
Mutual Life Insurance Company and its successors and assigns.
5.14 Financial Covenants.
Borrower shall have or maintain, on a stand-alone basis:
(a) At all times, a Tangible Net Worth of not less than
$2,000,000; and
(b) an EBITDA Coverage Ratio as of the last day of each
of its fiscal quarters of not less than 1.0 to 1.0. This
covenant shall be tested quarterly and calculated on a rolling
four (4) fiscal quarter basis.
5.15 Further Assurances.
Borrower shall cause to be done, executed, acknowledged and
delivered all and every such further act, conveyance and
assurance as Lender shall reasonably require for accomplishing
the purposes of this Agreement, the Note and the other Loan
Documents. Borrower will defend and protect its title with
respect to the Collateral and will indemnify Lender with respect
thereto. Any payment in respect of such indemnity shall be made
directly to Lender on demand in immediately available funds.
Forthwith after notice from Lender, Borrower shall promptly,
without further consideration, execute, acknowledge and deliver
such further instruments and documents and will take such other
actions as Lender may deem reasonably necessary or advisable from
time to time to ensure the enforceability or priority of the
Liens granted hereby, or otherwise to confirm and carry out the
intent and purpose of this Agreement. If at any time, any
Licenses are required to be obtained by Borrower for Borrower to
own and/or operate Borrower's business, Borrower shall forthwith
obtain such Licenses, maintain the same in full force and effect,
unless deemed reasonably unnecessary for Borrower to own and/or
operate its business (provided that such failure does not
otherwise create or cause an Event of Default), and execute and
deliver to Lender, an assignment agreement in form and substance
reasonably satisfactory to Lender, pursuant to which Borrower
will assign to Lender and grant to Lender a first perfected Lien
covering all such Licenses.
5.16 Additional Provisions Regarding Leases.
Borrower shall not amend, modify or alter any provision
contained in the DM Lease or any other Lease which would
materially adversely affect Borrower's ability to satisfy the
Obligations as they become due. Borrower shall not accept any
rent or additional rent payments under any of its Leases with its
tenants, other than that which is due for the current or prior
month(s), except in connection with the transactions contemplated
by the Stage One Restructuring. Upon the occurrence and during
the continuance of an Event of Default, upon the written request
by Lender to Borrower, Borrower will deliver to all of its
tenants written notifications directing them to make all payments
under their respective Lease directly to Lender or as Lender
shall otherwise direct.
5.17 Investments and Loans. Except as otherwise permitted
herein and loans to the Parent Guarantor, Affiliate Guarantors
and Lynton Properties, Borrower will not make or have outstanding
at any time any investments in or loans to any other Person
(including any Subsidiary or affiliate), whether by way of
advance, guaranty, extension of credit, capital contribution,
purchase of stocks, notes, bonds or other securities or evidences
of Indebtedness, or otherwise, other than: (i) in direct
obligations of the United States of America; (ii) in time
certificates of deposit issued by banks in the United States
having capital, surplus and undivided profits in excess of
$200,000,000; and (iii) in short term commercial paper carrying
the highest rating by Moody's Investor Service, Inc. or Standard
and Poors Corporation rating services and issued by corporations
headquartered in the United States, in currency of the United
States of America.
ARTICLE 6. SECURITY INTEREST
6.1 Security.
As security for the full and timely payment and performance
of all of the Obligations of Borrower to Lender, Borrower hereby
assigns, pledges, transfers and sets over to Lender, and hereby
agrees that Lender shall have, and hereby grants to and creates
in favor of Lender, a first security interest under the UCC
subject to no other Liens (other than Liens covering two vending
machines), in and to the following, in each case whether now
existing or hereafter arising, now owned or hereafter acquired,
located at the Premises or used in connection with the operation
of Borrower's business at the Premises ("Collateral"):
6.1.1 All property (personal, real or otherwise) and
fixtures of Borrower, of every kind and description, tangible or
intangible, including, without limitation, all goods, equipment,
furniture, machinery, inventory, accounts, chattel paper,
tradenames, trademarks, patents, general intangibles, credits,
claims, demands, contract rights, rights under agreements
(written or oral), licenses, permits, waivers, exemptions,
authorizations, consents, approvals, and other property, rights
and interests of Borrower; and
6.1.2 All accessions and additions thereto,
substitutions for, and all replacements of, any and all of the
foregoing, and all proceeds of the foregoing, cash and non-cash,
including insurance proceeds.
6.2 Lender Has Rights and Remedies of a Secured Party.
In addition to all rights and remedies given to Lender by
this Agreement, Lender shall have all the rights and remedies of
a secured party under the UCC.
6.3 Additional Provisions Applicable to the Collateral.
The parties agree that, at all times during the term of this
Agreement, the following provisions shall be applicable to the
Collateral:
6.3.1 Borrower covenants and agrees that it will keep
accurate and complete books and records concerning the Collateral
owned or acquired by it in accordance with GAAP.
6.3.2 Lender shall have the right to review the books
and records of Borrower pertaining to the Collateral and to copy
the same and to make excerpts therefrom, all at such reasonable
times upon reasonable notice and as often as Lender may
reasonably request; provided that, so long as there is no Event
of Default, such visitations and examinations shall be upon prior
notice to Borrower, during normal business hours and no more
frequently than twice during each calendar year.
6.3.3 Borrower shall maintain and keep its principal
place of business and its chief executive office at the address
set forth at the beginning of this Agreement, and at no other
location without giving Lender at least thirty (30) days prior
written notice of any move. Borrower shall maintain and keep its
records concerning the Collateral at such address and at no other
location without giving Lender at least thirty (30) days prior
written notice of any move. Borrower shall keep all Collateral
only at the Premises. Borrower may not move the Collateral
without the prior written consent of Lender.
6.3.4 Except for Liens granted to Lender and as
otherwise permitted herein, Borrower shall not sell, lease,
transfer or otherwise dispose of or encumber any of the
Collateral.
6.3.5 Except as otherwise permitted herein, Borrower
shall cause the Collateral to be maintained and preserved in the
same condition, repair and working order as when new, ordinary
wear and tear excepted, and shall promptly make or cause to be
made all repairs, replacements and other improvements in
connection therewith which are necessary or desirable to that
end.
6.3.6 Borrower shall not affix or permit the
Collateral to become affixed to real estate or to any other
goods, and such Collateral shall remain personal property,
whether or not so affixed.
6.4 Certain Covenants.
Borrower covenants and agrees with Lender for the benefit of
Lender that:
6.4.1 Borrower has and will have good and merchantable
title to all of its assets, including the Collateral, in each
case as from time to time owned or acquired by it, and shall keep
the Collateral free and clear of all Liens, other than those
granted to Lender, except as otherwise provided herein. Borrower
will defend such title against the claims and demands of all
Persons whomsoever.
6.4.2 Borrower will faithfully preserve and protect
Lender's Liens in the Collateral and will, at its own cost and
expense, cause said Liens to be perfected and continued
perfected, and for such purpose Borrower will from time to time
at the request of Lender and at the expense of Borrower, make,
execute, acknowledge and deliver, and file or record, or cause to
be filed or recorded, in the proper filing places, all such
instruments, documents and notices, including without limitation
financing statements and continuation statements, as Lender may
deem necessary or advisable from time to time in order to perfect
and continue perfected said security interest. Borrower will do
all such other acts and things and make, execute, acknowledge and
deliver all such other instruments and documents, including
without limitation further security agreements, pledges,
endorsements, assignments and notices, as Lender may deem
necessary or advisable from time to time in order to perfect and
preserve the priority of said Liens as a first and only Lien on
and security interest in the Collateral prior to the rights of
all other Persons therein or thereto.
6.4.3 Except as otherwise provided herein, Borrower
will not, without the prior written consent of Lender, (i) borrow
or permit any Person to borrow against the Collateral other than
the Loan to Borrower from Lender pursuant to this Agreement;
(ii) create, incur, assume or suffer to exist any Lien with
respect to any of the Collateral; (iii) permit any levy or
attachment to be made against any of the Collateral except any
levy or attachment relating to this Agreement; or (iv) permit any
financing statement to be on file with respect to any of the
Collateral, except financing statements in favor of Lender.
6.4.4 Risk of loss of, damage to or destruction of the
Collateral is and shall remain upon Borrower. Borrower will
insure the Collateral as provided in Section 5.3 of this
Agreement. If Borrower fails to effect and keep in full force
and effect such insurance or fails to pay the premiums thereon
when due, Lender may do so for the account of Borrower and add
the cost thereof to the Obligations and the same shall be payable
to Lender on demand. Borrower hereby assigns and sets over unto
Lender for the benefit of Lender all moneys which may become
payable on account of such insurance, including without
limitation any return of unearned premiums which may be due upon
cancellation of any such insurance, and directs the insurers to
pay Lender any amount so due. Lender, its officers, employees
and authorized agents and its successors and assigns, are hereby
appointed attorneys-in-fact of Borrower, for the purpose of
endorsing any draft or check which may be payable to Borrower in
order to collect the proceeds of such insurance or any return of
unearned premiums. Such appointment is irrevocable and coupled
with an interest. The proceeds of insurance shall be applied to
reduction of the Obligations in any order Lender may choose or,
in Lender's sole discretion, to the repair or replacement of the
Collateral, or any part thereof, in which case Lender may impose
such conditions on the disbursement of the proceeds as Lender in
its sole discretion deems appropriate.
6.4.5 Upon the occurrence and during the continuation
or existence of any Event of Default, Borrower shall promptly
upon demand by Lender assemble the Collateral and make it
available to Lender at the place or places to be designated by
Lender. The right of Lender to have the Collateral assembled and
made available to it is of the essence of this Agreement and
Lender may, at its election, enforce such right in equity for
specific performance.
6.4.6 Lender shall have no duty as to the collection
or protection of the Collateral or any part thereof or any income
thereon, or as to the preservation of any rights pertaining
thereto, beyond exercising reasonable care in the custody of any
Collateral actually in the possession of Lender. Lender shall be
deemed to have exercised reasonable care in the custody and
preservation of such of the Collateral as may be in its
possession if it takes such action for that purpose as Borrower
shall request in writing, provided that such requested action
shall not, in the judgment of Lender, impair Lender's security
interest in the Collateral or its rights in, or the value of, the
Collateral, and provided further that such written request is
received by Lender in sufficient time to permit it to take the
requested action.
ARTICLE 7. DEFAULTS
7.1 Events of Default.
The occurrence of one or more of the following described
events is an Event of Default:
7.1.1 Borrower fails to make any payment of principal
of or interest on the Note, within ten (10) days after such
payment is or shall become due; or
7.1.2 Borrower fails to perform or observe any of its
covenants or agreements contained herein or in any other Loan
Documents which cannot be cured; or
7.1.3 Borrower fails to perform or observe any other
covenant or agreement to be performed or observed by it hereunder
or under the other Loan Documents and such failure continues
unremedied for a period of twenty (20) days after such failure;
or
7.1.4 Borrower voluntarily creates, suffers to exist,
incurs or assumes any Lien, security interest, charge or
encumbrance on, or with respect to, any part of or all the
Collateral, or the Liens held by Lender in and to the Collateral
shall cease to be the first perfected Lien in and to the
Collateral, except that the following Liens shall be permitted
(the "Permitted Liens"): (a) Liens to secure taxes, assessments
and other government charges or claims for labor, material or
supplies in respect of obligations not overdue, (b) deposits or
pledges made in connection with, or to secure payment of,
worker's compensation, unemployment insurance, old age pensions
or other social security obligations, (c) Liens of carriers,
warehousemen, mechanics and materialmen, and other like Liens, in
existence less than 120 days from the date of creation thereof in
respect of obligations not overdue, (d) Liens, claims,
encumbrances, restrictions and security interests reflected in
the Title Insurance Commitment No. GLA150433N and the related
Title Insurance Policy issued by First American Title Insurance
Company, and (e) purchase money Liens and Liens to secure
capitalized lease obligations securing indebtedness permitted
under Section 5.13(e) provided that such Liens shall encumber
only new property or assets so acquired and shall not exceed the
fair market value thereof.
7.1.5 Borrower sells, assigns, leases, or otherwise
disposes of or relinquishes possession of, any Collateral,
provided that Borrower may dispose of or relinquish possession of
Collateral in the ordinary course of its business, provided that
such Collateral is replaced with Collateral having a value of not
less than the disposed Collateral and Lender is automatically
granted a first perfected Lien covering such new Collateral; or
7.1.6 any material representation or warranty made by
Borrower or Guarantors or Lynton Properties herein or in any
other Loan Document or in any document or certificate furnished
by Borrower to Lender in connection herewith or therewith at any
time proves to have been incorrect in any material respect when
made; or
7.1.7 this Agreement or any Loan Document at any time
for any reason ceases to be in full force and effect or is
declared by a court or governmental agency of competent
jurisdiction to be null and void; or
7.1.8 Borrower breaches or defaults (after giving
effect to any applicable grace or cure periods) under the terms
of any agreement, instrument or document with or for the benefit
of Lender which is not a Loan Document or under any other loan,
credit facility or other financial accommodation made by Lender
to Borrower, including, without limitation, all promissory notes,
guarantees, equipment leases, security agreements, mortgages and
deeds of trust; or
7.1.9 Borrower or the Parent Guarantor is convicted
under any criminal statute or there is a judgment against
Borrower or the Parent Guarantor in a civil proceeding, pursuant
to which the penalties or judgment include forfeiture of any of
the Collateral or a material portion of the assets of Borrower or
the Parent Guarantor, and such action is not stayed on appeal; or
7.1.10 Any Guarantor or Lynton Properties fails to
perform or observe any of its covenants or agreements contained
in its Guaranty, its Subordination Agreement or any other Loan
Documents to which it is a party which cannot be cured; or
7.1.11 Any Guarantor or Lynton Properties fails to
perform or observe any other covenant or agreement to be
performed or observed by it under the Loan Documents to which it
is a party and such failure continues unremedied for a period of
twenty (20) days after such failure; or
7.1.12 Any Guarantor or Lynton Properties breaches or
defaults (after giving effect to any applicable cure or grace
periods) under the terms of any agreement, instrument or document
with or for the benefit of Lender which is not a Loan Document or
under any other loan, credit facility or other financial
accommodation made by Lender to any Guarantor or Lynton
Properties, including, without limitation, all promissory notes,
guarantees, equipment leases, security agreements, mortgages and
deeds of trust; or
7.1.13 a proceeding is instituted seeking a decree or
order for relief in respect of Borrower or any Guarantor or
Lynton Properties in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect or for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar
official) of Borrower or any Guarantor or Lynton Properties, or
for any substantial part of its properties or for the
dissolution, winding-up or liquidation of its affairs or any
substantial part of any of its properties and such proceeding
remains undismissed or unstayed for a period of sixty
(60) consecutive days or such court enters a decree or order
granting the relief sought in such proceeding; provided that the
terms of this provision shall apply to the Affiliate Guarantors
and Lynton Properties only when they are indebted to Borrower or
Borrower is indebted to any such Affiliate Guarantor or Lynton
Properties; or
7.1.14 Borrower or any Guarantor or Lynton Properties
voluntarily suspends transaction of its business, commences a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, consents to the
entry of an order for relief in an involuntary case under any
such law or consents to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Borrower or any
Guarantor or Lynton Properties for any substantial part of any of
its properties, or makes a general assignment for the benefit of
creditors, or takes any action in furtherance of any of the
foregoing; provided that the terms of this provision shall apply
to the Affiliate Guarantors and Lynton Properties only when they
are indebted to Borrower or Borrower is indebted to any such
Affiliate Guarantor or Lynton Properties; or
7.1.15 there shall be a judgment or judgments against
Borrower or any Guarantor or Lynton Properties for any amount in
excess of $150,000 in the aggregate, which shall remain unpaid,
unstayed on appeal, undischarged, unbonded or undismissed for a
period of thirty (30) days or more; provided that the terms of
this provision shall apply to the Affiliate Guarantors and Lynton
Properties only when they are indebted to Borrower or Borrower is
indebted to any such Affiliate Guarantor or Lynton Properties; or
7.1.16 Borrower shall have conveyed, sold, assigned,
encumbered or otherwise transferred all or substantially all of
its assets (or any interest therein); or
7.1.17 Borrower fails to perform or observe any of its
covenants or agreements contained in Section 5.3 hereof or in the
letter regarding insurance requirements delivered by Borrower in
connection herewith (the "Insurance Letter"), or any such
insurance shall at any time cease to be in full force and effect;
or
7.1.18 Borrower shall have defaulted under or
otherwise breached any of the terms of the Subordinated
Debentures and/or the Subordinated Debenture Documents, which
default or breach is not waived or cured as provided therein.
7.2 Consequences of Event of Default.
7.2.1 If an Event of Default occurs, Lender may, by
notice to Borrower, declare the unpaid principal amount of the
Note and interest accrued thereon and all other Obligations and
liabilities of Borrower hereunder or under the Note or the Loan
Documents to be immediately due and payable and the same shall
thereupon become and be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, and an action therefor shall
immediately accrue.
7.2.2 In addition, if an Event of Default occurs,
Lender shall have all rights and remedies granted herein and in
the other Loan Documents and all rights or remedies available at
law or equity, whether as a secured party or otherwise (including
specifically those granted by the Uniform Commercial Code as in
effect in the jurisdiction or jurisdictions where the Collateral
is located) and, except as limited by Law, all remedies of Lender
(i) shall be cumulative and concurrent; (ii) may be pursued
separately, successively or concurrently against Borrower or
against all or any portion of the Collateral, at the sole
discretion of Lender; (iii) may be exercised as often as occasion
therefor shall arise, it being agreed by Borrower that the
exercise or failure to exercise any rights or remedies shall in
no event be construed as a waiver or release thereof or of any
other right, remedy or recourse; and (iv) are intended to be, and
shall be, nonexclusive. To the fullest extent permitted by
applicable Law, Lender may resort to the rights, remedies and
recourses set forth herein and any other security therefor in
such order and manner as Lender may elect.
7.2.3 Without limiting any of the foregoing, Borrower
agrees that (i) Lender may, with or without notice and without
legal process, enter upon any property owned, leased or otherwise
under the real or apparent control of Borrower or any agent
thereof or any other location where the Collateral may be located
and disassemble, disconnect, render unusable or repossess all or
any item of the Collateral; (ii) written notice mailed to
Borrower, as provided in this Agreement for the giving of notice,
shall be reasonable if given ten (10) days prior to (a) any
public sale or (b) the date after which a private sale may be
made; (iii) a sale of the Collateral may be made as a unit or in
parcels and for cash and upon terms; and (iv) Lender may buy the
Collateral at any public sale and at any private sale as
permitted by the UCC.
ARTICLE 8. MISCELLANEOUS
8.1 Further Assurances.
Borrower shall at any time and from time to time upon the
written request of Lender, execute and deliver such further
agreements, instruments and documents and do such further acts
and things as Lender may reasonably request in order to effect
the purposes of this Agreement.
8.2 Indemnity.
Borrower shall indemnify, defend and hold harmless Lender
from and against, and, upon demand, reimburse Lender for, all
claims, demands, liabilities, losses, damages, judgments,
penalties, costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, which may be
imposed upon, asserted against or incurred or paid by Lender, on
account of any act performed or omitted to be performed under
this Agreement, the Note or the other Loan Documents or on
account of any transaction arising out of or in any way connected
with the Collateral or this Agreement, the Note or the other Loan
Documents (including, without limitation, any litigation matter
involving claims by third parties), except as a result of the
willful misconduct or gross negligence of Lender.
8.3 No Implied Waiver; Cumulative Remedies.
No course of dealing and no delay or failure of Lender in
exercising any right, power or privilege under this Agreement,
the Note or any of the other Loan Documents shall affect such
right, power or privilege except as and to the extent that the
assertion of any such right, power or privilege shall be barred
by an applicable statute of limitations; nor shall any single or
partial exercise thereof or any abandonment or discontinuance of
steps to enforce such a right, power or privilege preclude any
further exercise thereof or of any other right, power or
privilege. The rights and remedies of Lender under this
Agreement, the Note or the other Loan Documents are cumulative
and not exclusive of any rights or remedies which Lender would
otherwise have.
8.4 Taxes.
Borrower agrees to pay or reimburse Lender for any and all
stamp, document, transfer, recording or filing taxes or fees and
all similar impositions payable or hereafter determined by Lender
to be payable in connection with this Agreement, the Note or the
other Loan Documents (including but not limited to those
necessary or advisable to record or to ensure the enforceability
or priority of this Agreement, the Note or the other Loan
Documents), as determined by Lender in its sole discretion from
time to time, and any other documents, instruments or
transactions pursuant to or in connection herewith, and Borrower
agrees to save Lender harmless from and against any and all
present or future claims or liabilities with respect to or
resulting from any delay in paying or omission to pay any such
taxes, fees or similar impositions.
8.5 Modifications, Amendments or Waivers.
Lender and Borrower may from time to time enter into written
agreements amending, modifying or supplementing this Agreement,
the Note or the other Loan Documents or changing the rights of
Lender or Borrower hereunder or thereunder, and Lender may from
time to time grant waivers or consents to a departure from the
due performance of the obligations of Borrower thereunder. Any
such agreement, waiver or consent must be in writing and shall be
effective only to the extent set forth in such writing. In the
case of any such waiver or consent, any Event of Default so
waived or consented to shall be deemed to be cured and not
continuing, but no such waiver or consent shall extend to any
subsequent or other Event of Default or impair any right
consequent thereto.
8.6 Holidays.
Except as otherwise provided herein, whenever any payment or
action to be made or taken hereunder or the Note or any other
Loan Document shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on
the next following Business Day (and such day shall be included
in the calculation of interest due).
8.7 Notices.
8.7.1 Except as otherwise provided herein, all notices
and other communications required under the terms and provisions
of this Agreement, the Note or the other Loan Documents shall be
in writing and shall become effective when delivered by hand or
received by overnight courier, telex, facsimile, telegram or
registered first class mail, postage prepaid, addressed as
follows:
If to Lender, at:
FINOVA Capital Corporation
95 North Route 17 South
Paramus, New Jersey 07652
Facsimile No. 201-712-3712
Attention: Pamela Marchant
Vice President
with a copy to: Winick & Rich, P.C.
919 Third Avenue
New York, New York 10022
Facsimile No. 212-308-5945
Attention: Michael A. Karpen, Esq.
If to Borrower, at:
Lynton Jet Centre, Inc.
9 Airport Road
Morristown Municipal Airport
Morristown, New Jersey 07960
Facsimile No. 201-292-1529
Attention: Manus O'Donnell
with a copy to: Danzig, Garubo & Kaye
75 Livingston Avenue
Roseland, New Jersey 07068
Facsimile No. 201-535-6293
Attention: David Kaye, Esq.
or at such other address as either party may, from time to time,
designate in writing to the other party hereto.
8.7.2 If any notice is given by telex, facsimile
transmission, or telegram, the party giving such notice shall
confirm such notice by a writing delivered by hand or overnight
courier; provided, however, that for all purposes hereunder,
notice shall be deemed effective at the time given by telex,
telecopier or telegram.
8.8 Reimbursement for Certain Expenses.
Borrower agrees to pay or cause to be paid and to save
Lender harmless against liability for the payment of all
reasonable out-of-pocket costs and expenses, including, without
limitation, all counsel fees and costs, incurred by Lender from
time to time (i) arising in connection with the negotiation,
execution, delivery, and recordation of this Agreement, the Note
and the other Loan Documents, and the transactions contemplated
hereby and thereby and all recording or filing fees, title
insurance, expenses, costs of appraisals and costs of
environmental due diligence, (ii) relating to any requested
amendments, waivers or consents to or in connection with this
Agreement, the Note or any other Loan Document, (iii) arising in
connection with Lender's enforcement or preservation of rights
under this Agreement, the Note or any other Loan Document,
including but not limited to such expenses as may be incurred by
Lender in the collection of the Note, and (iv) any other matters
relating to the Loan, Loan Documents, the Collateral or Borrower.
8.9 Governing Law.
THIS AGREEMENT, THE NOTE, THE OTHER LOAN DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW JERSEY.
8.10 Personal Jurisdiction and Service of Process.
BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST BORROWER UNDER, ARISING OUT OF, OR IN ANY
MANNER RELATING TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN ANY STATE COURT OF THE STATE OF NEW
JERSEY LOCATED IN BERGEN COUNTY OR IN THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW JERSEY. BORROWER, BY ITS EXECUTION
AND DELIVERY OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY
CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR PROCEEDING. BORROWER FURTHER AGREES
THAT ANY LEGAL ACTION OR PROCEEDING BORROWER MAY BRING, ARISING
OUT OF OR IN ANY MANNER RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS, SHALL ONLY BE BROUGHT IN ANY COURT OF THE STATE
OF NEW JERSEY LOCATED IN BERGEN COUNTY OR IN THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. BORROWER ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS,
NOTICE OR OTHER PROCESS RELATING TO SUCH ACTION OR PROCEEDING BY
DELIVERY THEREOF TO BORROWER IN THE MANNER PROVIDED FOR NOTICES
IN THIS AGREEMENT. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING
BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS. BORROWER
SHALL NOT BE ENTITLED IN ANY SUCH ACTION OR PROCEEDING TO ASSERT
ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER
THAN THE STATE OF NEW JERSEY, UNLESS SUCH DEFENSE IS ALSO GIVEN
OR ALLOWED BY THE LAWS OF THE STATE OF NEW JERSEY. NOTHING
HEREIN SHALL AFFECT OR IMPAIR IN ANY MANNER OR TO ANY EXTENT THE
RIGHT OF LENDER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION OR TO SERVE
PROCESS IN ANY MANNER PERMITTED BY LAW.
8.11 Waiver of Jury Trial.
BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING THE LOAN DOCUMENTS.
8.12 Severability.
The provisions of this Agreement, the Note and any other
Loan Document are intended to be severable. If any such
provision is held invalid or unenforceable in whole or in part in
any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
8.13 Prior Understandings.
This Agreement and the other Loan Documents supersede all
prior understandings and agreements, whether written or oral,
between the parties hereto relating to the transactions provided
for herein or therein.
8.14 Survival.
All representations and warranties of Borrower contained in
this Agreement or any other Loan Document or made in writing in
connection herewith or therewith shall survive the execution and
delivery of this Agreement, the Note and the other Loan
Documents, any investigation or inspection by Lender, the making
of the Loan hereunder, the payment of the Note or the expiration
of this Agreement. All covenants and agreements of Borrower
contained herein shall continue in full force until payment in
full of the Obligations. Borrower's obligation to pay the
principal of and interest on the Note and all such other amounts
shall be absolute and unconditional under any and all
circumstances.
8.15 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of Lender and Borrower and their respective successors
and permitted assigns, except that Borrower may not assign or
transfer any of its rights or obligations hereunder or any
interest herein without the written consent of Lender which
Lender may withhold in its absolute discretion. Any actual or
attempted assignment by Borrower without Lender's consent shall
be null, void and of no effect whatsoever. Lender may assign its
rights and obligations hereunder and under the Note and the other
Loan Documents in whole or in part. If Lender makes such an
assignment, the assignee shall have all of the rights of the
Lender and Borrower shall not assert against the assignee any
defense, counterclaims or setoff which Borrower may have against
Lender. Except to the extent otherwise required by its context,
the word "Lender" where used in this Agreement shall mean and
include the holder of the Note originally issued to Lender, and
the holder of such Note shall be bound by and have the benefits
of this Agreement to the same extent as if such holder had been a
signatory hereto.
8.16 Counterparts.
This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each
of which, when so executed and delivered by the parties,
constituting an original but all such counterparts together
constituting but one and the same instrument.
8.17 Publicity.
Lender and Borrower are hereby authorized to issue
appropriate press releases and to cause a tombstone to be
published announcing the consummation of the transactions
contemplated in this Agreement, including the aggregate amount of
the Loan.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this
Agreement effective as of the day and year first above written.
LYNTON JET CENTRE, INC.,
a New Jersey corporation
By: /s/Manus O'Donnell
Name: Manus O'Donnell
Title: Vice President
Federal Tax Identification No. 22-3037551
FINOVA CAPITAL CORPORATION
By: /s/Pamela Marchant
Name: Pamela Marchant
Title: Vice President
EXHIBIT A
SECURED PROMISSORY NOTE
$4,000,000 November 13, 1996
Paramus, New Jersey
FOR VALUE RECEIVED, the undersigned, LYNTON JET CENTRE,
INC., a New Jersey corporation ("Borrower"), hereby promises to
pay to the order of FINOVA CAPITAL CORPORATION ("Lender"), the
principal sum of Four Million Dollars ($4,000,000), together with
interest on the unpaid principal balance hereof from time to time
outstanding at the rate per annum, and all on the dates and as
otherwise provided in that certain Loan and Security Agreement of
even date herewith (the "Loan Agreement") by and between Lender
and Borrower.
This Note is the Note referred to in the Loan Agreement, is
secured as set forth in the Loan Agreement, may be prepaid only
as provided in the Loan Agreement and is entitled to the benefits
of the Loan Agreement. All capitalized terms used in this Note
which are not otherwise defined herein shall have the respective
meanings ascribed to them in the Loan Agreement.
All payments of principal and interest on this Note are to
be made in lawful money of the United States of America in
immediately available funds, without setoff, counterclaim or
deduction of any nature, at the office of Lender at 95 North
Route 17 South, Paramus, New Jersey 07652 (or such other place as
the holder hereof shall designate to the Borrower in writing),
prior to 3:00 p.m., local time, on the day when due.
If any payment of principal or interest becomes due on a day
which is not a Business Day, that payment shall be made on the
next Business Day.
Lender and Borrower intend this Note to comply in all
respects with all provisions of law and not to violate, in any
way, any legal limitations on interest charges. Accordingly, if,
for any reason, Borrower is required to pay, or has paid,
interest at a rate in excess of the highest rate of interest
which may be charged by Lender or which Borrower may legally
contract to pay under applicable law (the "Maximum Rate"), then
the interest rate shall be deemed to be reduced, automatically
and immediately, to the Maximum Rate, and interest payable
hereunder shall be computed and paid at the Maximum Rate and the
portion of all prior payments of interest in excess of the
Maximum Rate shall be deemed to have been prepayments of the
outstanding principal of this Note and applied to the
installments in the inverse order of their maturities.
If Borrower fails to make any payment of principal or
interest within ten (10) days after the payment is due, Borrower
shall pay a late charge of five percent (5%) of the unpaid
amount, but in no event more than the maximum amount permitted by
applicable law, and such amount shall be payable upon demand.
Such payment is not interest for the use of money, but is
intended to cover Lender's administrative costs occasioned by
such delay.
Upon the occurrence of an Event of Default, Lender shall
have all of the rights and remedies contained in the Loan
Agreement, including, without limitation, the right, at its
option, to declare all indebtedness under this Note to be
immediately due and payable.
Borrower hereby expressly waives presentment for payment,
demand for payment, notice of dishonor, protest, notice of
protest, notice of non-payment, and all lack of diligence or
delays in collection or enforcement of this Note or the Loan
Agreement.
Lender may extend the time of payment of this Note,
postpone the enforcement hereof, release any Collateral, or grant
any other indulgences whatsoever, without affecting or
diminishing Lender's right of recourse against Borrower, as
provided herein and in the Loan Agreement and in the other Loan
Documents, which right is hereby expressly reserved. The failure
to assert any right by Lender shall not be deemed a waiver
thereof.
Borrower agrees to pay all costs, fees and expenses of
collection, including, without limitation, Lender's reasonable
attorneys' fees and disbursements, in the event that any action,
suit or proceeding is brought by the holder hereof to collect
this Note or if an Event of Default occurs.
THIS NOTE IS DEEMED TO HAVE BEEN MADE IN, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW
JERSEY. BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST BORROWER UNDER, ARISING OUT OF, OR IN ANY
MANNER RELATING TO THIS NOTE, THE LOAN AGREEMENT OR THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE COURT OF THE STATE OF
NEW JERSEY LOCATED IN BERGEN COUNTY OR IN THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. BORROWER, BY ITS
EXECUTION AND DELIVERY OF THIS NOTE, EXPRESSLY AND IRREVOCABLY
CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR PROCEEDING. BORROWER FURTHER AGREES
THAT ANY LEGAL ACTION OR PROCEEDING BORROWER MAY BRING, ARISING
OUT OF OR IN ANY MANNER RELATING TO THIS NOTE, THE LOAN AGREEMENT
OR THE OTHER LOAN DOCUMENTS, SHALL ONLY BE BROUGHT IN ANY COURT
OF THE STATE OF NEW JERSEY LOCATED IN BERGEN COUNTY OR IN THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY.
BORROWER ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY
COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS RELATING TO SUCH
ACTION OR PROCEEDING BY DELIVERY THEREOF TO BORROWER IN THE
MANNER PROVIDED FOR NOTICES IN THE LOAN AGREEMENT. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN
ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR
ANY SIMILAR BASIS. BORROWER SHALL NOT BE ENTITLED IN ANY SUCH
ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER
THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW JERSEY, UNLESS
SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF
NEW JERSEY. NOTHING HEREIN SHALL AFFECT OR IMPAIR IN ANY MANNER
OR TO ANY EXTENT THE RIGHT OF LENDER TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER
JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
IN WITNESS WHEREOF, Borrower has duly executed this Note on
the date first above written.
LYNTON JET CENTRE, INC.
a New Jersey corporation
By:________________________________
Name:______________________________
Title:_____________________________
Federal Tax Identification No. 22-3037551
